Great year for TwentyFour Select Monthly Income – TwentyFour Select Monthly Income Fund has published results for the 12 months ended 30 September 2021. The share price started the financial year at 83.40p and finished at 96.20p with the Net Asset per share rising from 86.79p to 93.32p over the same period. For the year ended 30 September 2021, total annual dividends declared were 6.52p. This translates into an NAV total return of 14.9% and the narrowing of the discount meant that shareholders did even better.
Extract from the manager’s report
“Risk markets were generally supportive during the period, with risk-off periods emerging more frequently as the period drew to a close, with valuations more elevated.
After a share tender in January, partially funded by asset sales, the portfolio yield was increased, which also helped performance. Most of the activity centered on raising funds for the tender process in early January, when just over 46 million shares were tendered, 10 million of which were placed with investors or purchased by the Company’s Corporate brokers, leaving the balance to be raised from asset sales. In discussion with the Board, the PMs used the sale process as an opportunity to refocus the Fund by selling low yielding assets. The securities sales process was transacted methodically and with very strong execution resulting in an average premium of NAV+0.38% on the sales made. Furthermore the sales facilitated a bottom up relative value exercise with the optimisation of the portfolio resulting in the mark-to-market yield increasing from 6.67% to 7.10%, while the gross purchase yield was improved from 7.13% to 7.35%. The PMs managed to make these improvements to the portfolio yields, whilst still maintaining the weighted average rating at BB- immediately after the tender. At year end, whilst the exposure to BBB and BB rated securities did decrease compared to prior year, the BB- weighted average rating was still maintained.
Credit performed well during the period. The sterling index returned 11%, the euro index returned almost 10%, and the dollar index returned 11%, while the CoCo bond index returned 11.4% – all in sterling terms. Emerging markets struggled due to dollar strength and idiosyncratic issues and returned 6.4%, while investment-grade indices returned between 0-2%. Rates struggled with the sterling, euro and dollar government bond indices down 7%, 1% and 3.8%, respectively, in sterling terms.
The Fund performed well, returning 14.94%, with all sectors posting positive returns, led by subordinated banks and robust performance from CLOs, Insurance and the European high yield sectors.”
SMIF : Great year for TwentyFour Select Monthly Income