Vontobel Fund - TwentyFour Absolute Return Credit Fund

Why invest?

• Focus on short dated triple-B rated bonds aims to capture nearly all the returns of broader credit indices, but with a fraction of the drawdowns
• Short dated, investment grade bonds have statistically proven through every market cycle they have provided the very best risk-adjusted returns within fixed income
• Rigorous back-testing before launch in 2015 proved the Fund’s strategy would have delivered consistent returns even in poor years for credit such as 2008 and 2011
• Since launch the Fund has consistently outperformed its return target, with just 1.5% daily annualized volatility

Investment universe

• A minimum of two-thirds of the Fund will be invested in investment grade bonds with a maturity of five years or lower, which our research has shown have proven through every market cycle provided the very best risk-adjusted returns within fixed income
• Beyond this core portfolio, there are strict risk constraints – a maximum of 20% of the Fund can be invested in investment grade European ABS, 33% in government bonds, and 33% in sub-investment grade debt at any one time
• We avoid frequent hedging as we believe it is too expensive and places unnecessary pressure on fund managers to call every market twist and turn with absolute precision. We use tactical rates and credit hedges to better control risk around infrequent extreme events
• We have not designed the Fund to achieve the highest total return our skill set allows, irrespective of risk, because that is unpredictable. Instead we have set a lower, predictable but still attractive return target, which can be achieved by using our skill set to its maximum at an acceptable level of risk

Investment team

From the beginning we built our team of investment professionals to reflect the structure of today’s fixed income market. From structuring and ratings specialists to trading and investment banking, we have people who know the bond markets inside out. Our team is deliberately drawn from a diverse range of nationalities and cultures. This is how we look to escape the echo chamber, using diverse insights from people who are not having the same conversations and reading the same press.