TwentyFour and Gemini are delighted to announce that, following the launch of the Monument Bond Fund in August 2009, its net asset value passed the key £100 million milestone in March.
The Fund’s growth has reflected its performance, which has been remarkably steady since launch, with 8 consecutive positive months, share prices up over 7%* overall and low volatility.
The Fund, which invests in a diversified portfolio of UK, European and Australian Residential Mortgage- Backed Securities (RMBS) rated at least AA- at the time of investment, continues to perform in line with its stated aim of providing an attractive level of income, whilst maintaining a strong focus on capital preservation. According to Mark Holman, one of the Managing Partners at TwentyFour, “the combination of high-quality, low-volatility assets coupled with solid performance has really struck a chord with our clients. Once they understand the robustness of the asset class, they quickly see that highly-rated non-US RMBS continue to offer the most compelling risk-weighted returns in the fixed income universe”.
Commenting on the performance of RMBS investments, Ben Hayward, one of the Fund’s portfolio managers, says “despite the volatility in housing markets globally, and the economic downturn, there have been virtually no defaults in European and Australian RMBS, as these securities are backed by well-underwritten mortgages and are structured to withstand extreme economic underperformance. The Fund does not hold any investments that are underperforming the investment team’s conservative performance expectations”.
TwentyFour believes that whilst the Fund has performed very well to date in parallel with the strong rally in fixed income, the floating rate income provided by its RMBS portfolio is also very attractive in view of the uncertainty surrounding the timing of the inevitable future rises in interest rates. Hayward explains “the current economic environment is being supported by low interest rates. However this is not a viable ongoing scenario, especially if inflation becomes a more pressing issue. The Fund can only invest in floating rate securities, meaning the securities will yield more as interest rates move upwards, but without the corresponding price reduction that fixed rate securities would suffer in a rising interest rate environment. This will be a significant benefit to investors in the Fund, and is one of the reasons that TwentyFour believes that the Fund will continue to attract strong interest from investors”.
Gemini, which acts as the third party distributor for the Monument Bond Fund in the UK, is particularly pleased with the growth in assets considering that prior to the launch of the Fund TwentyFour, an independent City-based fixed income specialist, was relatively unknown outside the institutional market place.
Stuart Alexander, Managing Director of Gemini says “When launching Gemini we wanted to create a business that tapped into the investment skills of professionals normally only accessed by institutional clients – hence our strap line ‘Institutional Investment for everyone else’.”
The RMBS sector was relatively unknown in the wider marketplace and a fairly widespread misconception has persisted that it is all about the US. In fact, as previously mentioned, the Monument Bond Fund only invests in highly-rated assets in the UK, Europe and Australia. The sub-prime markets in the US for example would not be eligible for investment by the Fund.
Alan Jupp, Sales Director of Gemini comments “educating the clients has been a big part in the sales process”. He continues “dispelling the myths of the RMBS sector together with presenting the compelling argument for an alternative asset class to corporate bonds has been achieved via our experienced and well respected sales team”.
Included among the Fund’s supporters are IFAs and high profile multi-managers along with investment houses with institutional mandates.
For further information please contact:
TwentyFour Asset Management
Tel: 020 7015 8903
Partner, Portfolio Management
TwentyFour Asset Management
Tel: 020 7015 8930
Gemini Investment Management
Tel: 020 7426 4928
*Class I Accumulation Shares.
Notes to Editor
For Financial Advisers and Institutional/Professional Investors only – not to be relied upon by private investors or any other persons. This document is for information only and does not constitute a recommendation or solicitation to subscribe or purchase any products. Prospective investors are strongly advised to speak to a professional adviser in respect of the information contained herein and before making any decision to invest. Neither TwentyFour nor Gemini is acting as your financial adviser or in any other fiduciary capacity with respect to an investment in the Fund.
This document is issued by TwentyFour Asset Management LLP, which is authorised and regulated by the Financial Services Authority.
Please remember that past performance is not a guide to future performance. The value of an investment and any income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested. Investments in fixed interest securities and bonds are subject to credit and market risk. The value of the underlying assets and therefore the value of shares in the Fund will be impacted by the perceived credit risk of an issuer. Investments may be concentrated in any one country, sector or issuer. Derivatives may be used to achieve Fund objectives and allocations may vary significantly over time. The yield or the capital value of the Fund (or both) can fluctuate and investors may not get back their original investment. Please note that investments in foreign markets are subject to special currency, political, and economic risks. Exchange rates may cause the value of underlying overseas investments to go down or up. Details of the specific and general risks associated with this Fund are contained within the Prospectus and the Simplified Prospectus of the Fund.
If you invest indirectly through a third party provider you are advised to consult them directly as charges, performance and terms and conditions may differ materially.