TwentyFour Select Monthly Income Ord
Rated Fund 2017-2018. A high yield fuelled by an 'illiquidity premium'
TwentyFour Select Monthly Income is at the higher end of the risk spectrum as it has the vast majority of its assets in sub-investment grade stock. It currently yields 6.6 per cent and distributes income monthly.
A relatively new investment trust, having been set up in 2014, it is run by a six-strong team at TwentyFour Asset Management, which specialises in fixed income investing. The trust is diversified across a range of fixed income products including asset-backed securities, bank capital, corporate loans, high yield bonds and leveraged loans.
The trust is specifically designed to take advantage of the premium returns available from less liquid fixed income investments. Such securities do not offer enough liquidity for open-ended investment funds, but are well suited to a closed-ended vehicle. However, in order to provide investors in this trust with liquidity, the managers offer a quarterly share buyback facility.
Holdings are typically held to maturity. In terms of ratings, almost 70 per cent of the �160 million trust was in bonds rated B or BB at the end of 2017. On a sector basis, a third was in both banks and asset-backed securities, with smaller allocations to European high yield, US high yield, insurance bonds and emerging markets.
Its interest rate duration is actively managed, currently averaging three years, and its foreign currency exposure is hedged to sterling.
The trust has proved popular with investors and its shares traded at a premium of up to 5.5 per cent during 2017. At the end of the year they were on a more modest 3.6 per cent premium.
Narrative and ratings content all as of 01 January 2018.See all Money Observer rated funds
Gary spent the first 20 years of his career as a consistently successful proprietary credit trader before becoming a portfolio manager, during which time he traded the complete range of fixed-income securities and derivative products. Gary is one of the 7 founding partners of TwentyFour and a member of the four-strong portfolio management team where his primary responsibility is the co-management of the Firm’s Monument and Dynamic Bond Funds as well as a number of bespoke portfolios for institutional clients. Before founding TwentyFour, Gary was a partner and investment manager at Synapse Investment Management. Prior to this Gary was Head of European Credit trading at Wachovia Bank NA, where he led a successful proprietary trading group focused on European & Asian credit products. Gary’s investment banking career began in 1987 in the Corporate Finance & Syndicate group at Daiwa Securities where he created structured bonds for Asian investors as well as becoming one of the pioneers of the asset swap market. Between 1993 and 2000 Gary was Head of Credit Trading at the Royal Bank of Canada, where he was at the forefront of the development of the credit derivative market and a member of the professional market panel involved in the first standardised ISDA document. Prior to joining Wachovia, Gary was Head of Trading at CDC Ixis, running a group of 12 traders based in London, Paris & Frankfurt.
Eoin has worked within the fixed-income market for over 12 years during which time he has focused on a wide range of securities from corporates and financials to asset-backed debt. Eoin is one of the 7 founding partners of TwentyFour and a member of the four-strong portfolio management team where his primary responsibility is the co-management of the Firm’s Monument and Dynamic Bond Funds in addition to a number of bespoke portfolios for institutional clients. Before founding TwentyFour, Eoin was a partner and portfolio manager at Synapse Investment Management. Prior to this, Eoin was a Vice President at London Credit Structures, part of Citigroup Alternative Investments. Eoin joined Citigroup in 1997 and initially worked in the Independent Control department before moving to the Credit team where he analysed banks and financial institutions, corporate and asset-backed securities. Eoin joined the portfolio management team in 2002 and concentrated on the structured finance sector, covering: RMBS, CMBS, autos, student loans, consumer loans, CLOs and various other asset-backed securities.
Felipe joined TwentyFour in 2011 and day-to-day responsibilities include monthly portfolio reporting to clients, macroeconomic analysis and credit analysis. In addition, Felipe also has responsibility for foreign exchange hedging of our Funds and Bespoke Portfolios. Prior to joining TwentyFour, Felipe worked as an Asset Allocation and Strategy Analyst at Celfin Capital in Chile. Here, Felipe took an active role in developing the team’s Strategic view of the global macro economy and asset classes. Felipe also had a key part to play in analysing and constructing High Net Worth clients’ portfolios and in communicating the Asset Allocation decisions to clients and Private Bankers. Felipe graduated from Pontificia Universidad Catolica de Chile with a Bachelor’s degree in Economics and Business Administration before obtaining a Masters in Finance from the London Business School.
Data provided by Morningstar.
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