Investment Grade

Vontobel Fund - TwentyFour Absolute Return Credit Fund

ISIN
LU1734078154
Valor
39471995

Investment objective

This bond fund aims to achieve a positive absolute return over a period of three years by keeping a modest level of volatility, while respecting risk diversification.


Key features

The fund can invest worldwide, with a focus on Europe, in corporate bonds and similar fixed-interest and floating-rate securities in various currencies of diverse issuers of good quality (investment grade). The fund can use derivative financial instruments for hedging purposes.


Approach

The experienced and diverse investment team takes high-conviction decisions based on rigoros macro-economic, technical and issuer analyses. In line with their continuous assessment of market conditions and future developments, the team allocates interest-rate and cedit risks with the aim to benefit from any market environment. They select those securities and instruments within the investment universe in which they see the most rewarding yield and/or hedging values. The team actively adapts the portfolio to invest in attractive opportunities whenever they occur while keeping risks under control.

87.57
NAV
-0.66%
Performance YTD
As at 30 Nov 2021

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

An easy to understand, long-only, unlevered fund that targets the very best risk-adjusted returns within fixed income.

Fund characteristics

  • Target returns of 250bp over Libor after fees, with volatility below 3% and limited hedging and derivative use
  • A genuinely long only, unlevered bond fund which is easy to understand and designed to keep volatility low
  • A minimum of two-thirds of the Fund will be invested in short dated investment grade bonds at all times
  • Strict limits on the asset classes, maturities, ratings and names the Fund can buy in order to help lower risks, limit volatility and still provide real opportunities to add value
  • Strong focus on stock selection seeking to generate alpha and lower risks. All bond positions have to pass a rigorous screening process to show that they have the ability to deliver good return potential with low expected volatility
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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.

Insights

All data is as at 29 Oct 2021 unless otherwise indicated.

Fund performance

Cumulative performance

1M YTD 3 yrs p.a. Since Inception
AHN (hedged) CHF -0.6% -0.4% 0.9% 1.0%

Performance for 12 month periods

1 Nov 2016 - 29 Oct 2017 1 Nov 2017 - 29 Oct 2018 1 Nov 2018 - 29 Oct 2019 1 Nov 2019 - 29 Oct 2020 1 Nov 2020 - 29 Oct 2021
AHN (hedged) CHF NA NA 1.6% 0.4% 0.6%

Performance for calendar years

Volatility & risk

Portfolio
Volatility 1.2%
Sharpe Ratio 1.6
Interest rate duration 2.0
Credit duration 2.0
Expected annual yield 0.7%
Average Rating A-
Number of positions 102.0
[Daily since inception]

All data is as at 30 Nov 2021 unless otherwise indicated.

Fund data
Portfolio Manager TwentyFour Asset Management LLP
Fund Domicile Luxembourg
Fund Currency GBP
Share Class Currency CHF
End of fiscal year 31 August
Share Class Launch date 11 Dec 2017
Distribution type Dist
Last distribution 3.21 (24 Nov 2021)
SFDR Classification Article 8
Fund Registrations AT, CH, DE, ES, FI, FR, GB, IE, IT, LI, LU, NL, NO, PT, SE, SG
Share Class Registrations CH, GB, LU, SG
Nav Information
Highest since launch 100.35
Lowest since launch 90.17
Fund size in mln. GBP 3,220.23
Share class size in mln. CHF 3.38
Fees And Expenses
Management fee 0.40%
TER* 0.60% (28 Feb 2021)
Identifiers
ISIN LU1734078154
Valor 39471995
Bloomberg VOTHNHC LX
WKN A2H9PX
Parties
Depository RBC Investor Services Bank S.A.
Management Company Vontobel Asset Management S.A.
Swiss Paying Agent Bank Vontobel AG
Swiss Representative Vontobel Fonds Services AG

Available Share Classes

Share class Currency ISIN Distrib. Type Launch date Management fee TER* TER Date
AHN (hedged) EUR LU1683487620 Dist Retail 12 Oct 2017 0.40% 0.60% 28 Feb 2021
AHN (hedged) CHF LU1734078154 Dist Retail 11 Dec 2017 0.40% 0.60% 28 Feb 2021
AI GBP LU1267852249 Dist Institutional 28 Aug 2015 0.40% 0.50% 28 Feb 2021
AQG GBP LU1530788402 Dist Institutional 5 Dec 2016 0.25% 0.35% 28 Feb 2021
AQHG (hedged) USD LU1767065979 Dist Institutional 16 Feb 2018 0.25% 0.41% 28 Feb 2021
AQHG (hedged) EUR LU1530788238 Dist Institutional 5 Dec 2016 0.25% 0.41% 28 Feb 2021
AQHN (hedged) EUR LU1331789450 Dist Retail 18 Dec 2015 0.40% 0.60% 28 Feb 2021
AQHNG (hedged) USD LU1410502493 Dist Retail 18 May 2016 0.25% 0.45% 28 Feb 2021
AQN GBP LU1331789377 Dist Retail 18 Dec 2015 0.40% 0.54% 28 Feb 2021
AQNG GBP LU1368730674 Dist Retail 26 Feb 2016 0.25% 0.39% 28 Feb 2021
G GBP LU1273680238 Accum Institutional 28 Aug 2015 0.25% 0.35% 28 Feb 2021
HG (hedged) EUR LU1925065655 Accum Institutional 8 Jan 2019 0.25% 0.41% 28 Feb 2021
HI (hedged) CHF LU1599320444 Accum Institutional 25 Apr 2017 0.40% 0.56% 28 Feb 2021
HN (hedged) CHF LU2270707495 Accum Retail 17 Dec 2020 0.40% 0.60% 28 Feb 2021
HN (hedged) EUR LU1734078238 Accum Retail 11 Dec 2017 0.40% 0.60% 28 Feb 2021
HN (hedged) USD LU1767066357 Accum Retail 9 Feb 2018 0.40% 0.60% 28 Feb 2021
I GBP LU1267852082 Accum Institutional 28 Aug 2015 0.40% 0.50% 28 Feb 2021
N GBP LU1267852595 Accum Retail 28 Aug 2015 0.40% 0.54% 28 Feb 2021

* TER includes performance fee where applicable

All data is as at 29 Oct 2021 unless otherwise indicated.

Rating Structure

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