TwentyFour Select Monthly Income Fund (SMIF) has released its annual results for the year ending 30 September 2023.
- Over the period SMIF reported a NAV per share total return of 17.54% over the year, with its portfolio returning 12.26%. SMIF’s objective is to generate a return of 8-10% per year.
- The largest contributor to SMIF’s performance came form its collateralised loan obligations, with its high yielding assets also being noteworthy contributors.
- Over the period SMIF declared dividends totalling 7.37p per share, up from the 6.39p for the prior year. SMIF operates with a monthly dividend target of 0.5p per share, which the portfolio manager believes is achievable.
- Over the year SMIF traded on an average premium of 0.03%, and thanks to its premium rating over the year it was able to issue 28m new shares. c.4.5m shares were repurchased via tender over the year, resulting in a net increase in share in circulation 23.6m, with 240.8m shares currently in circulation.
- At the last AGM, the previous chairperson, Claire Whittet, retired and was replaced by Ashley Paxton, SMIF’s current chair.
Ashley Paxton, chairperson, commented:
“The Portfolio Manager’s base case is for a “soft-ish” landing whereby it expects a short and shallow recession and for the unemployment rate and default rates to increase moderately. We expect to see a deterioration of economic fundamentals as the lag effects of the many interest rate increases feed through economies, leading to a mild recession as the economy is supported by strong consumers, corporates and banking sector. This should give central banks the ability to cut interest rates later in 2024.
“The Board believes there is a lot of value in the portfolio and the very attractive yields offer good protection against future volatility and the Portfolio Manager is actively adjusting the portfolio to find better opportunities for value, in order to optimise the Company’s performance.”