Sustainable

At TwentyFour Asset Management we believe environmental, social and governance (ESG) factors can have a material influence on the value of our investments and the outcomes we achieve for our clients. In recent years many investors have begun to consider sustainability a key element of their own investment objectives, and have sought products that specifically avoid investing in companies perceived to operate in an unsustainable way.

As the popularity of these strategies has grown, however, it has become increasingly clear that there are many different interpretations of these terms across the asset management industry, and indeed in society at large. At TwentyFour, we consider investor choice to be a critical component of our ESG and sustainable fixed income solutions, which is why we offer two distinct approaches.

First, our firm-wide ESG integration framework ensures ESG risks are a factor in every investment decision our portfolio managers make, across every one of the firm’s strategies. For investors that wish to go further, we have developed sustainable funds tailored to the specific challenges of the bond markets, using a careful mix of positive and negative screening that seeks to purposely reward companies for doing the right things. With this ESG integration in place, we are able to offer investors separate funds with stated sustainability criteria.

These funds deploy a negative screen that rules out all the sectors investors concerned with sustainability would expect – alcohol, tobacco, gambling and so on – but then crucially add a positive screen for a minimum threshold ESG score, meaning companies are purposely rewarded for doing the right things. Our research has shown that this careful mix of positive and negative screens, which we have tailored to the specific challenges of sustainable investing in fixed income, enables us to optimise the funds risk adjusted returns.

Learn more about our ESG integration approach

Funds

4 funds available

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TwentyFour Sustainable Enhanced Income ABS Fund

Asset-Backed Securities

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Share class Currency ISIN Valor NAV YTD As at
A Acc GBP IE00BMX0BH45 - - -
A Inc GBP IE00BMX0BJ68 103.41 2.70% 29 Oct 2021
TwentyFour Sustainable Multi Sector Credit Fund

Flexible Bonds

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Share class Currency ISIN Valor NAV YTD As at
A Inc GBP IE00BN4L5481 - - -
Vontobel Fund - TwentyFour Monument European Asset Backed Securities

Asset-Backed Securities

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Share class Currency ISIN Valor NAV YTD As at
A EUR LU1882612564 43753862 99.49 1.31% 30 Nov 2021
AH (hedged) GBP LU1882612721 43753874 101.58 2.09% 30 Nov 2021
AH (hedged) USD LU1882612994 43753876 106.39 1.92% 30 Nov 2021
AH (hedged) CHF LU1882612648 43753868 99.86 1.04% 30 Nov 2021
AHI (hedged) GBP LU2388185246 113723386 100.10 - 30 Nov 2021
AQHG (hedged) GBP LU2388185089 113724408 100.15 - 30 Nov 2021
AQHNG (hedged) GBP LU2388184868 113723425 100.14 - 30 Nov 2021
HG (hedged) GBP LU2388185162 113724426 100.09 - 30 Nov 2021
HI (hedged) CHF LU1602256296 36484864 102.10 1.45% 30 Nov 2021
HI (hedged) GBP LU2388185329 113723424 100.10 - 30 Nov 2021
HI (hedged) USD LU1602256700 36484869 112.98 2.33% 30 Nov 2021
HN (hedged) CHF LU1882613299 43753894 101.11 1.40% 30 Nov 2021
HN (hedged) USD LU1882613455 43753897 108.07 2.34% 30 Nov 2021
HN (hedged) GBP LU1882613372 43753896 104.64 2.20% 30 Nov 2021
HNG (hedged) GBP LU2388184942 113724188 100.14 - 30 Nov 2021
I EUR LU1602255561 36484858 104.36 1.76% 30 Nov 2021
N EUR LU1882613026 43753879 102.38 1.73% 30 Nov 2021
Vontobel Fund - TwentyFour Sustainable Short Term Bond Income

Investment Grade

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Share class Currency ISIN Valor NAV YTD As at
AHI (hedged) CHF LU2210410036 56212872 100.01 -1.00% 30 Nov 2021
AHI (hedged) EUR LU2081486727 51133685 96.53 -0.75% 30 Nov 2021
AHI (hedged) USD LU2210409616 56212864 101.24 -0.11% 30 Nov 2021
AN GBP LU2386632371 113621592 99.34 - 30 Nov 2021
AQG GBP LU2081485596 51132454 97.47 0.10% 30 Nov 2021
AQHNG (hedged) EUR LU2081486487 51132510 99.50 - 30 Nov 2021
AQHNG (hedged) USD LU2403268092 114481675 99.48 - 30 Nov 2021
AQI GBP LU2081485919 51151249 99.30 -0.02% 30 Nov 2021
AQNG GBP LU2081485679 51132474 96.91 0.08% 30 Nov 2021
G GBP LU2081485240 51132430 101.71 0.13% 30 Nov 2021
HI (hedged) CHF LU2210409962 56212870 99.99 -1.02% 30 Nov 2021
HI (hedged) USD LU2081487709 51155828 101.24 -0.11% 30 Nov 2021
HI (hedged) EUR LU2081486560 51132543 99.99 -0.66% 30 Nov 2021
HNG (hedged) USD LU2386631993 113621000 99.26 - 30 Nov 2021
HNG (hedged) EUR LU2081486214 51132436 99.20 - 30 Nov 2021
NG GBP LU2081485323 51132452 101.60 0.09% 30 Nov 2021

Why invest?

  • Our research has shown that with the right combination of positive and negative screening, stated sustainability criteria don’t detract from returns
  • TwentyFour’s ESG framework puts the onus on the team’s own credit work, rather than relying on third party analysts or data providers
  • A focus on more nuanced factors such as controversies, engagement and momentum in ESG analysis can potentially deliver higher returns
  • Regulatory initiatives are increasingly pushing asset owners into more sustainable strategies, and we expect companies seen as running sustainable businesses to benefit from increased capital flows in the coming years 

Why choose active ESG?

 

At TwentyFour, we believe a truly sustainable approach to bond investing requires active management. Here are five reasons why.

 

The data problem

ESG data in the fixed income space is often limited and typically covers only up to 60% of the investable universe, so index construction can be difficult and unreliable. Active managers are able to fill this data gap through rigorous in-house research.

Inconsistent scoring

Different ESG data providers often award the same company vastly different ESG scores based on the issues they consider material. For example, Tesla typically gets a high environmental score for its work on electric vehicles but is given a low governance score and marked down for toxic material mining practices. So is it a good or bad ESG investment? That will depend heavily on the data provider, and what weighting their scoring process gives to the E versus the G.

Qualitative metrics

Active research takes into account qualitative metrics such as controversies, which rules-based models often struggle to pick up. Even when they do, what some of these models consider material may not be a negative issue. For example, the Asset4 model considers acquisitions a ‘controversy’, something the TwentyFour portfolio management team may disagree with in certain circumstances, since acquisitions are not inherently negative to bondholders and as such should be judged on a case by case basis.

 

Forced buyers

Passive funds can become forced buyers when an index is rebalanced, and conversely cannot sell out of a company that is in the index. As a result, engagement that will actually drive change is difficult or impossible.

Static approach

Passive investing doesn’t take into account momentum, i.e. a company’s movement in the direction of positive or negative change. Negative screening rules can work in some circumstances, but the role of sustainable investing is also to push for better ESG outcomes, for which an active approach is far better suited.

Meet the team

 

Graeme Anderson

Graeme Anderson

Chair of ESG Steering Group