Investment Grade

Vontobel Fund - TwentyFour Sustainable Short Term Bond Income

ISIN
LU2081485596
Valor
51132454
Sedol
BL4KLK9

Investment objective

This bond fund aims to achieve a positive return over 3 years with a volatility of maximum 3% per annum, and seeks to promote environmental and social characteristics while respecting risk diversification.


Key features

The fund invests worldwide mainly in shorter-term investment-grade bonds and similar fixed-interest or floating-rate securities in various currencies of diverse issuers that promote environmental or social characteristics in their economic activities. The fund's average maturity is 3.5 years. 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. To define the investment universe, the team applies a two-step sustainability screening based on a proprietary scoring model: 1) to exclude issuers active in controversial businesses, like tobacco, alcohol, weapons, or gambling, or intensively using fossil resources, 2) to include only those issuers whose sustainability scores exceed the defined minimum. In line with their continuous assessment of market developments, the team flexibly allocates interest-rate and credit risks in the portfolio, striving to benefit throughout the economic cycle.

98.91
NAV
0.92%
Performance YTD
As at 29 Jul 2021

We believe that Environmental, Social and Governance (ESG) factors can have an influence on the value of our investments and the main objectives should always be to enhance investor returns and to play a part in promoting better outcomes. This is why we decided to launch the Vontobel Fund - TwentyFour Sustainable Short Term Bond Income, within which we apply both positive and negative screening based on our proprietary ESG model.

Fund characteristics

The Fund has an ESG overlay of both negative and positive screens. A positive screen is applied to any issuer who scores greater than or equal to 34 in the TwentyFour Observatory ESG system/scoring model, while a negative screen helps enable the Fund to avoid companies with material production1 in the following sectors:

 Tobacco  Alcohol  Weapons  Animal Testing For Cosmetic Purposes  Gambling  Coal Intensive Industries  Adult Entertainment  UN Global Compact Violators2

Our initial modelling, where we applied an ESG overlay to our existing Absolute Return Credit fund’s performance, showed that the higher the ESG score (and therefore the higher the positive screen), the higher the return would have been, but also the higher the volatility. We chose a score of 34 as our modelling showed this would have given the best possible risk-adjusted returns (Sharpe Ratio), while keeping volatility less than 3% at all times, and having a high level of portfolio diversification.

Investment universe

(as at 31st December 2019)

*Negative and Positive screens would only be applied to a fund following the Sustainable, Long Only, Short Duration Credit approach, not to the existing Vontobel Fund - TwentyFour Absolute Return Credit Fund

 

Reasons to invest in the Vontobel Fund TwentyFour Sustainable Short Term Bond Income

  • Our research has shown that adding a positive screen on top of a negative screen could have delivered similar returns to our existing Absolute Return Credit fund3 (which has delivered more than LIBOR+250bp after fees since launch).
  • Our quantitative back-testing showed that a purely negative screen would not have brought performance benefits to investors looking for sustainability in credit.
  • Our proprietary sustainable scoring model has a proven link with strong credit performance, and marries external ESG data with portfolio manager views on credit.
  • A minimum of two-thirds of the fund is invested in short dated investment grade bonds, which have proven through every market cycle they have provided the very best risk-adjusted returns.

1 We define 'material production' as meaning sources of revenue greater than 5%. We do however strongly believe in rewarding those companies who are providing solutions to ESG problems and/or are making positive strides to improve the direction of their company from an ESG perspective. Thus we have the flexibility when deciding whether a negative screen ultimately applies to take a view on the ESG 'Momentum' of a company.

2 We will not knowingly hold any issuer producing cluster munitions and landmines (anti-personnel mines) in line with international conventions.

3 Refers to the Vontobel Fund - TwentyFour Absolute Return Credit Fund G Share Class in GBP.

Insights

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

Fund performance

Cumulative performance

1M YTD Since Inception
AQG GBP 0.3% 0.7% 2.4%

Performance for 12 month periods

1 Jul 2016 - 30 Jun 2017 1 Jul 2017 - 30 Jun 2018 1 Jul 2018 - 30 Jun 2019 1 Jul 2019 - 30 Jun 2020 1 Jul 2020 - 30 Jun 2021
AQG GBP NA NA NA NA 3.2%

Performance for calendar years

Volatility & risk

Portfolio
Volatility 0.9%
Sharpe Ratio 3.2
Information Ratio
Modified Duration 2.8
Average Maturity 1.6
Average Coupon 3.9%
Yield To Maturity 2.3%
[1 year]

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

Fund data
Portfolio Manager TwentyFour Asset Management LLP
Fund Domicile Luxembourg
Fund Currency GBP
Share Class Currency GBP
End of fiscal year 31 August
Share Class Launch date 22 Jan 2020
Distribution type Dist
Last distribution 0.94 (21 Jun 2021)
Minimum investment 50,000,000.00
Fund Registrations AT, CH, DE, ES, FI, FR, GB, IE, IT, LI, LU, NL, PT, SE
Share Class Registrations CH, GB, LI, LU
Nav Information
Highest since launch 100.41
Lowest since launch 95.91
Fund size in mln. GBP 280.72
Share class size in mln. GBP 82.57
Fees And Expenses
Management fee 0.25%
Performance fee 0.00%
TER* 0.35% (28 Feb 2021)
Identifiers
ISIN LU2081485596
Valor 51132454
Bloomberg VOTBIAG LX
SEDOL BL4KLK9
WKN A2PZB4
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
AHI (hedged) EUR LU2081486727 Dist Institutional 22 Jan 2020 0.40% 0.53% 28 Feb 2021
AHI (hedged) CHF LU2210410036 Dist Institutional 27 Aug 2020 0.40% 0.53% 28 Feb 2021
AHI (hedged) USD LU2210409616 Dist Institutional 27 Aug 2020 0.40% 0.53% 28 Feb 2021
AQG GBP LU2081485596 Dist Institutional 22 Jan 2020 0.25% 0.35% 28 Feb 2021
AQI GBP LU2081485919 Dist Institutional 22 Jan 2020 0.40% 0.50% 28 Feb 2021
AQNG GBP LU2081485679 Dist Retail 22 Jan 2020 0.25% 0.39% 28 Feb 2021
G GBP LU2081485240 Accum Institutional 22 Jan 2020 0.25% 0.35% 28 Feb 2021
HI (hedged) CHF LU2210409962 Accum Institutional 27 Aug 2020 0.40% 0.53% 28 Feb 2021
HI (hedged) USD LU2081487709 Accum Institutional 27 Aug 2020 0.40% 0.53% 28 Feb 2021
HI (hedged) EUR LU2081486560 Accum Institutional 22 Jan 2020 0.40% 0.56% 28 Feb 2021
NG GBP LU2081485323 Accum Retail 22 Jan 2020 0.25% 0.39% 28 Feb 2021

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

Rating Structure

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