Press Release - Monument Bond Fund

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THE MONUMENT BOND FUND 7% p.a. Expected Yield*

TwentyFour Asset Management, a City based independent credit specialist boutique comprising some of the market’s leading talents in fixed income, is to launch The Monument Bond Fund to invest in Residential Mortgage-Backed Securities (RMBS).

The aim of the Fund, which will be a UK authorised UCITS III fund**, is to provide stable and predictable income with a high degree of capital preservation.

Historically the RMBS sector has been restricted to the institutional investor base and this is the first time a dedicated RMBS fund has been offered to the wider investor community.

Within fixed income, RMBS can be most directly compared with corporate bonds, although the Monument Bond Fund will invest in bonds of a higher credit quality than corporate bonds.  In fact, the Fund’s minimum permitted rating is “AA”, with the majority of the Fund’s securities to be rated “AAA”.

RMBS are typically floating rate, meaning that as interest rates go up so too will the coupons on the bonds, so the Fund’s price should remain relatively stable regardless of rate moves.  This can be contrasted with corporate bond funds whose prices generally fall when interest rates rise.

According to Mark Holman, one of the Managing Partners at TwentyFour, “During periods of weak economic activity and turbulent markets, investors often turn to fixed income to provide stable returns and an emphasis on the preservation of capital”.  He adds “We all know fixed income outperforms when interest rates fall and bond prices rise, but now with base rates at 0.5% and the Treasury pouring money into the economy, it would be prudent to assume the next trend in rates will be upwards.  The Monument Bond Fund takes advantage of the excellent opportunities in the fixed income market, offering a very attractive yield while remaining focused on capital preservation”.

With over 1000 eligible RMBS bonds in the market, the Fund will look at making a diverse range of investments.  In geographical terms it will only look at mortgage pools originated in the UK, Europe and Australia.

Ben Hayward, one of the Fund’s four portfolio managers, explains “Over the last 20 years securitisation of mortgages has become one of the mainstream long term financing tools, and is an area we have vast experience in.  RMBS bonds pay interest and principal out of cash-flows from pools of underlying residential mortgages, ring-fenced for the bondholders and structured to provide significant further levels of protection.  Not only do high quality RMBS withstand our own rigorous stress tests extremely well, but the vast majority have also retained their credit ratings following the recent wholesale re-rating of the fixed income sector by the ratings agencies”. 

TwentyFour has appointed Gemini Investment Management as its Appointed Representative for the distribution of the Monument Bond Fund within the UK. 

Stuart Alexander, Managing Director of Gemini says “Gemini is all about distributing innovative product to the market and tapping into the experience of institutional and specialist investment teams, otherwise not accessed by the broader investment arena.  The Monument Bond Fund is an exciting opportunity for the market place to have an alternative to typical corporate bond funds whilst assuming a potentially lower risk profile”.

For further information please contact:

Mark Holman Ben Hayward Stuart Alexander
Managing Partner Partner, Portfolio Manager Managing Director
TwentyFour Asset Management TwentyFour Asset Management Gemini Investment Mangement
Tel: 020 7015 8903 Tel: 020 7015 8930 Tel: 020 7426 4928

*Expected Yield: As with most other authorised bond funds the distributions made by the Fund will be calculated on the basis of the “effective yield” of the Fund’s portfolio over the relevant period.  For each security, the effective yield is the discounted rate of estimated future cash receipts during the expected life of the security.  Where the security has been purchased at a price lower than its face value and it is expected to mature at par, the effective yield will be comprised of both the expected coupons and the portion of the purchase discount that is allocated to the relevant calculation period.  As such, distributions made by the Fund will be comprised partly of coupons received on its bonds, and partly of the deemed appreciation of the bond’s principal value during the relevant period.

** The launch of the Fund is dependent on its authorisation by the Financial Services Authority.


Notes to Editor

Risk Factors

When considering an investment in the Monument Bond Fund, investors and potential investors should review the latest Prospectus or Simplified Prospectus issued in respect of PFS TwentyFour Investment Funds (including Appendix 4 of the Prospectus as it relates to the Fund).  Particular consideration should be given to the Section of the Prospectus entitled “Risk Factors” and the Section of Appendix 4 to the Prospectus entitled “Specific Risk Issues” or, alternatively, to the section of the Simplified Prospectus entitled “Risks”.  The Prospectus and Simplified Prospectus will be made available upon request following the approval of PFS TwentyFour Investment Funds and the Monument Bond Fund by the FSA.

The risks highlighted in the Prospectus and the Simplified Prospectus cover a wide range, some of which apply to most funds investing in securities (including, but not limited to, general economic and market conditions, market risks, credit risk, investment and trading risks in general, financial derivatives, currency risk/hedging and illiquid portfolio instruments) and others which are more specific to funds investing in the fixed income universe including RMBS. 

The investments of the Fund will be subject to the normal and unforeseen market fluctuations and other risks inherent in investing in securities and financial instruments.  Past performance is not a guide to future returns; the value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.  There is no guarantee that the investment aim of the Fund, or its risk monitoring, hedging and diversification goals, will be achieved and results may vary over time.  An investment in the Fund may not be appropriate for investors who are not able to take a medium to long term view of their investment. 

Disclaimer: The information in this document is for Financial Advisers and Institutional/Professional Investors only and should not be relied upon by private clients.  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 financial adviser or in any other fiduciary capacity with respect to an investment in the Monument Bond Fund. 

The views, opinions and forecasts expressed in this document are based on TwentyFour’s research, analysis and house views at the time of going to print. 

About TwentyFour Asset Management

TwentyFour Asset Management LLP was founded in 2008 with the aim of providing investors with advisory services and forward-thinking investment products enabling them to meet both the challenges and opportunities presented by today's credit markets.

More than ever before, investors in credit markets require asset managers to be both highly specialised and highly experienced if they are to exploit the unprecedented opportunities that currently exist whilst avoiding the potentially costly pitfalls.  TwentyFour is perfectly positioned to give clients a leading edge in these markets:

  • Highly experienced team of successful credit specialists.
  • Unburdened by legacy distractions or conflicts.
  • Flexible approach to ensure complete alignment of interests.
  • New products targeted specifically at the current markets.
  • Wide range of specialist advisory services.
  • Tried and tested institutional infrastructure.
  • Rigorous investment and risk management processes.

TwentyFour takes a hybrid approach to asset management, combining the best attributes of traditional and alternative managers. 

TwentyFour Asset Management LLP is a Limited Liability Partnership incorporated in England and is authorised and regulated in the UK by the Financial Services Authority. 

About Gemini Investment Management

Gemini Investment Management works in partnership with both Professional Intermediaries and Investment Professionals to create the best in investment products along with providing bespoke marketing solutions to asset management businesses that may have limited expertise in the retail and wholesale marketplace. This arrangement enables firms to sell their products through a virtual sales operation whilst retaining their independence in brand and name. 

Gemini collectively has over 75 years experience between the 3 senior directors. Experience that has seen not just the recent bear market but periods of volatility in 1987, 1991, 1997 and 2001 as markets have lunged from one crisis to another. The directors have worked in these markets and positioned funds and companies correctly to benefit from the opportunities that await the well prepared firms. 

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