Mind the Gap
With September set to be the first negative month for most risk asset markets since March, it is worth analysing what has been driving the reversal.
A specialist fund that invests across a broad range of investment grade and non-investment grade European asset-backed securities (ABS), making use of less liquid securities to enhance the portfolio’s income.
TwentyFour Enhanced Income ABS Fund invests predominantly in UK and European ABS, including mortgage-backed securities and collateralised loan obligations (CLOs). Up to 20% of the portfolio may be allocated to ABS securities outside of the UK and EU.
Investment objective
The Fund seeks to achieve income and long-term capital growth.
Why invest?
- TwentyFour’s ABS expertise allows the team to target more attractive income in lower rated, less liquid, higher yielding areas of the market.
- The Fund may also invest in unrated debt securities through private placement funding trades, which are not publicly traded and are less liquid, but can provide investors with more favourable yields and structures.
- Features such as credit enhancement, loss-absorbing reserve funds, and the legal separation of issuer and asset pool are built-in protections for ABS investors.
- Transactions are highly transparent with detailed reports showing the performance of each loan in the asset pool, enabling investors to conduct their own research.
- ABS remains a poorly understood asset class, meaning those that put in the effort and expertise can be rewarded with a complexity premium.
