CLOs boost TwentyFour Select Monthly Income Fund’s H1 performance
TwentyFour Select Monthly Income Fund (SMIF) reported a net asset value (NAV) total return per share of 4.9 per cent in the first half of its fiscal year, boosted by higher interest rates that benefitted collateralised loan obligations (CLOs) in its portfolio.
The London-listed firm, which invests in a diversified portfolio of credit securities, said that income was the main driver of returns during the period, with the portfolio benefitting from attractive starting yields.
The strongest performing sectors were CLOs and insurance, delivering 5.83 per cent and 6.04 per cent respectively.
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CLOs, which are floating rate, benefitted from high central bank base rates and attractive spread levels compared to the high-yield sector, SMIF said.
“Our bottom-up approach to credit investing has continued to yield positive results for the company,” said George Curtis, portfolio manager at TwentyFour.
“We remained overweight asset-backed securities, particularly CLOs, and subordinated financials, as higher starting yields supported performance in both sectors. CLOs continue to benefit from elevated interest rates, given they are floating rate, and higher starting yields in both CLOs and European banks have seen both sectors perform strongly.
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“We expect macro volatility to remain elevated given policy uncertainty in the US, although we expect European credit to remain well protected from the direct tariff impact; the company has negligible exposure to businesses with a direct tariff exposure. We will look to continue to focus on analysing the best opportunities in the credit space, with a key emphasis on buying companies that are well able to manage through multiple economic scenarios.”
SMIF saw its net assets increase to £234.38m by 31 March 2025, up from £219.77m as of 30 September 2024.
It traded at an average premium to NAV of 2.09 per cent during the six-month period to 31 March 2025.
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“We are pleased with the company’s performance during the period in which the company was able to issue 16,900,000 new ordinary shares at a two per cent premium to NAV at issue date, in response to shareholder demand,” said Ashley Paxton, chair of SMIF.
“SMIF performed strongly with a NAV total return per ordinary share for the period of 4.9 per cent, including a dividend per ordinary share paid of 3.88p, comfortably exceeding the dividend target of 6p per ordinary share per annum. The dividends for the period followed the board’s decision to distribute excess income to shareholders more evenly over the year.”
SMIF’s share price was broadly flat by mid-morning trading.
