TwentyFour Income Fund Limited (TFIF), the £906m income fund investing in asset-backed securities, achieved a 5.9% investment return in the six months to 30 September and declared 4p of dividends in line with its 8p annual target before the final balancing payment at year-end.
The company traded at an average premium of 1.3% above net asset value, reflecting investor demand for the floating rate portfolio that saw it issue £42.4m in a fund raising last month.
Fund manager Aza Teeuwen said performance was positive in all securitised sectors but collateralised loan obligations (CLOs) and significant risk transfer (SRT) were the best areas, returning 8% and 6.8%.
The portfolio had a mark-to-market yield of 10.3% with proposed regulatory changes in Europe likely to further underpin demand for asset-backed securities from banks and insurers, despite continued political and fiscal uncertainty.
Our view
James Carthew, head of investment company research at QuotedData, said: “TwentyFour Income reports another solid set of numbers. I’m reassured by the note of caution that the managers sound about some parts of their market, especially volatility in long duration government bonds and difficulties being experienced by borrowers with poor credit, and the actions that they have taken to mitigate this.”
