TwentyFour Select Monthly Income Fund reports 22.6pc NAV growth
TwentyFour’s Select Monthly Income Fund has reported a net asset value (NAV) per ordinary share of 22.6 per cent for the 12 months ending 30 September 2024.
By comparison, NAV total return per share in 2023 was 17.54 per cent.
The fund has also announced a total dividend payment of 7.38p per ordinary share, which is higher than the initial target of 6p.
The TwentyFour Select Monthly Income Fund invests in collateralised loan obligations (CLOs) and subordinated financials. The firm’s CLO investments returned 25.9 per cent, while subordinated financials returned 24.22 per cent on AT1 bonds, and 25.28 per cent for restricted Tier 1 bonds. The European high yield segment of the fund’s portfolio returned 17.7 per cent.
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TwentyFour said that CLOs benefitted from higher for longer central bank rates over the past year.
Looking ahead, the portfolio manager said that he expects the fund’s CLO and subordinated financials business to continue to offer attractive relative value in the year ahead.
“We continue to focus on our rigorous bottom-up process to find areas of the market where we see attractive relative value,” said George Curtis, portfolio manager, TwentyFour.
“Both the CLO and subordinated financials sectors have benefitted from supportive fundamental and macro tailwinds, whilst offering a pick-up in spread and yield on a risk-adjusted basis.
“We expect current fundamental drivers, including strong consumer and corporate balance sheets, to support credit markets going into 2025, with our focus continuing to be on our current overweight allocations. Our investment universe also continues to grow with credit quality at the highest it has ever been, further mitigating the risk of defaults.
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“[The fund] remains of a size where we can rotate quickly between sectors as we look to maximise returns for shareholders by continuing to look for the best opportunities across the credit spectrum.”
Net assets in the fund increased from £181.7m in 2023 to £219.8m in 2024. The company said that it has traded at an average 1.44 per cent premium for most of the period in contrast to the wider investment company market.
“The company has benefitted from TwentyFour’s expertise in credit markets and overweight allocation to two specific sectors – CLOs and subordinated financials – to provide shareholders with both consistent monthly income and double digit capital growth,” added Ashley Paxton, chair of the TwentyFour Select Monthly Income Fund.
“The company’s strong performance is reflected in the issuance of 18,310,813 new shares during the year to meet shareholder demand, making the company one of the most prolific issuers in the investment company sector during the period.”
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