Investment Grade

Vontobel Fund - TwentyFour Sustainable Short Term Bond Income

ISIN
LU2081486560
Valor
51132543
Sedol
BL4KLW1

Investment objective

This bond fund aims to achieve a positive return over three years (volatility target: maximum 3% per annum) and seeks to promote environmental or social practices, while respecting risk diversification.


Key features

The fund invests worldwide mainly in shorter-term bonds in different currencies of various issuers of investment grade quality that seek to promote environmental or social practices. The average maturity of the portfolio 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 rigorous 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 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.

95.67
NAV
-4.34%
Performance YTD
As at 11 Aug 2022

A short term bond fund that aims to provide investors with a sustainable fixed income solution without compromising overall returns.

Based on TwentyFour’s well-known Vontobel Fund – TwentyFour Absolute Return Credit Fund (ARC), SSTBI applies both positive and negative ESG screening to the investment universe, a system designed to reward companies for sound ESG practices. Like ARC, SSTBI is an actively managed short term bond fund that aims to deliver steady returns in any market environment while keeping volatility to a minimum. With strict risk parameters and a focus on short dated investment grade bonds, the managers aim to sustainably capture nearly all the returns of higher risk strategies but with a fraction of the drawdowns expected in tougher market conditions.

Why invest?

  • Our ESG screening process helps to ensure investors’ capital is invested sustainably, while still benefiting from TwentyFour’s specialist and active approach to fixed income
  • A negative screen rules out familiar ‘sin’ sectors, but then importantly a positive screen excludes any bond issuers we score lower than 34 out of 100
  • Our research has shown that this threshold of 34 would have given the best possible risk-adjusted returns for a given low level of volatility and appropriate diversification
  • A minimum of two-thirds of the fund is invested in 0-5yr investment grade bonds, which we consider the best source of risk-adjusted returns within fixed income
  • The portfolio has a limit of around 100 positions to allow for stock selection alpha, and a strong bias towards BBB rated corporate bonds in order to target better yields

“By ruling out ‘sin’ sectors but actively rewarding bond issuers in the top half of our ESG scoring distribution, we believe we can target the very best risk-adjusted returns in fixed income without compromising on performance.”

Chris Bowie, Partner, Portfolio Management

A tailored mix of positive and negative screening


Negative and Positive Screens would only be applied to Vontobel Fund – TwentyFour Sustainable Short Term Bond Income. Source: TwentyFour


Investment team

Insights

All data is as at 29 Jul 2022 unless otherwise indicated.

Fund performance

Cumulative performance

1M YTD Since Inception
HI (hedged) EUR 1.1% -4.3% -4.3%

Performance for 12 month periods

08.11 - 07.12 08.12 - 07.13 08.13 - 07.14 08.14 - 07.15 08.15 - 07.16 08.16 - 07.17 08.17 - 07.18 08.18 - 07.19 08.19 - 07.20 08.20 - 07.21 08.21 - 07.22
HI (hedged) EUR NA NA NA NA NA NA NA NA NA 1.8% -5.3%

Performance for calendar years

Portfolio characteristics

Portfolio
Volatility 2.6%
Sharpe Ratio negative
Information Ratio
Modified Duration 1.7
Average Maturity 1.5
Average Coupon 3.9%
Yield To Maturity 4.1%
[1 year]

All data is as at 11 Aug 2022 unless otherwise indicated.

Fund data
Portfolio Manager TwentyFour Asset Management LLP
Fund Domicile Luxembourg
Fund Currency GBP
Share Class Currency EUR
End of fiscal year 31 August
Share Class Launch date 22 Jan 2020
Distribution type Accum
SFDR Classification Article 8
Fund Registrations AT, CH, DE, ES, FI, FR, GB, IE, IT, LI, LU, NL, PT, SE, SG
Share Class Registrations AT, CH, DE, ES, FI, FR, GB, IE, IT, LI, LU, SG
Nav Information
Highest since launch 101.20
Lowest since launch 94.66
Fund size in mln. GBP 553.71
Share class size in mln. EUR 68.42
Fees And Expenses
Management fee 0.40%
Performance fee 0.00%
TER* 0.57% (28 Feb 2022)
Identifiers
ISIN LU2081486560
Valor 51132543
Bloomberg VOTBIHH LX
SEDOL BL4KLW1
WKN A2PWLS
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% 0.57% 28 Feb 2022
AHI (hedged) USD LU2210409616 Dist Institutional 27 Aug 2020 0.40% 0.57% 28 Feb 2022
AHI (hedged) CHF LU2210410036 Dist Institutional 27 Aug 2020 0.40% 0.57% 28 Feb 2022
AN GBP LU2386632371 Dist Retail 4 Oct 2021 0.40% 0.55% 28 Feb 2022
AQG GBP LU2081485596 Dist Institutional 22 Jan 2020 0.25% 0.36% 28 Feb 2022
AQHNG (hedged) USD LU2403268092 Dist Retail 5 Nov 2021 0.25% 0.46% 28 Feb 2022
AQHNG (hedged) EUR LU2081486487 Dist Retail 5 Nov 2021 0.25% 0.46% 28 Feb 2022
AQI GBP LU2081485919 Dist Institutional 22 Jan 2020 0.40% 0.51% 28 Feb 2022
AQN GBP LU2081486057 Dist Retail 29 Nov 2021 0.40% 0.55% 28 Feb 2022
AQNG GBP LU2081485679 Dist Retail 22 Jan 2020 0.25% 0.40% 28 Feb 2022
G GBP LU2081485240 Accum Institutional 22 Jan 2020 0.25% 0.36% 28 Feb 2022
HI (hedged) EUR LU2081486560 Accum Institutional 22 Jan 2020 0.40% 0.57% 28 Feb 2022
HI (hedged) CHF LU2210409962 Accum Institutional 27 Aug 2020 0.40% 0.57% 28 Feb 2022
HI (hedged) USD LU2081487709 Accum Institutional 27 Aug 2020 0.40% 0.57% 28 Feb 2022
HNG (hedged) EUR LU2081486214 Accum Retail 4 Oct 2021 0.25% 0.46% 28 Feb 2022
HNG (hedged) USD LU2386631993 Accum Retail 4 Oct 2021 0.25% 0.46% 28 Feb 2022
N GBP LU2081485836 Accum Retail 29 Nov 2021 0.40% 0.55% 28 Feb 2022
NG GBP LU2081485323 Accum Retail 22 Jan 2020 0.25% 0.40% 28 Feb 2022

* TER includes performance fee where applicable

All data is as at 29 Jul 2022 unless otherwise indicated.

Rating Structure

View all documents View latest documents

Document Date EN
Factsheets & Commentaries
Factsheet Jul 2022
Monthly Commentary Jul 2022
KIIDs
KIID Apr 2022
Legal Documents
AGM EGM invitation Jan 2022
AGM EGM invitation May 2021
AGM EGM invitation Jan 2021
AGM EGM invitation Jan 2020
Articles of Association Apr 2016
Notification to Investors Sep 2021
Notification to Investors Jul 2021
Notification to Investors May 2021
Notification to Investors Mar 2021
Notification to Investors Feb 2021
Notification to Investors Nov 2019
Sales Prospectus Jan 2022
View more Legal Documents View less Legal Documents
Financial Reports
Annual Distribution Nov 2021
Annual Report Aug 2021
Distribution Dates Jan 2022
Quarterly Distribution Jun 2022
Semi-Annual Report Feb 2022
UK Tax Reporting Aug 2021
Dealing Information
Holiday Calendar 2022 Jun 2022
Order Subscription Form Jan 2020
Policies
Sanctioned Countries Sep 2016
Shareclass Naming Convention Jan 2022

Summary

The Sub-Fund promotes environmental and social characteristics by following integration and exclusions approaches by investing in debt securities of companies with excellent Environmental, Social and Governance ratings.
No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective a sustainable investment.

Environmental or social characteristics of the financial product

The Sub-Fund invests in debt securities of companies with excellent Environmental, Social and Governance ratings. 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.

Investment strategy

Our investment process consists of detailed, systematic qualitative and quantitative analysis of a potential investee’s sustainability risks and sustainability factors (collectively Sustainability Indicators). Integrating Sustainability Indicators is a central pillar in the investment process with the aim of improving the long-term risk-return characteristics of the sub-fund’s portfolio and supporting elevated social or environmental practices by the investee companies.

Proportion of investments

We have applied our sustainability selection criteria to 100% of the securities in the sub-fund.

Monitoring of environmental or social characteristics

Compliance with the environmental and social characteristics is monitored on an on-going basis.

Methodologies

We seek to avoid investments in companies with material production in tobacco, alcohol, gambling, adult entertainment, controversial weapons and carbon intensive industries, and companies involved in animal testing for cosmetic purposes. This list is not exhaustive and may change from time to time to reflect new developments and research in the field of sustainable investment, for example where technology or social trends evolve. In addition, issues/securities must have an ESG rating above a minimum threshold based on our proprietary scoring model and we positively screen companies through a comprehensive analysis process, which may include the use of specialized rating agencies and systems.

In addition to the scoring of securities, the portfolio management system records positive or negative changes and to enables us to understand and assess individual bonds on a relative value basis, given ESG factors – in this sense the ESG assessment does not solely dictate buy or sell recommendations, but it is part of an overall assessment of the validity of an investment decision. Further information on the model and the ESG approach can be found at https://www.twentyfouram.com/responsible-investment.

Data sources and processing

The sustainability ratings are based upon information raw data from specialized third-party ESG data providers compiled and evaluated in the proprietary in-house sustainability model database. Additional fundamental information from companies, media, NGOs as well as international organizations is evaluated in the database. The major third-party ESG data provider is ASSET4.

Limitations to methodologies and data

The data obtained from third-party data providers or issuers may be incomplete, inaccurate, or unavailable and the assumptions or models on which internal analysis rests may have flaws that render the internal assessment incomplete or inaccurate. As a result, there exists a risk of incorrectly assessing a security or issuer, resulting in the incorrect inclusion or exclusion of a security. There is also a risk we may not apply the relevant criteria of the ESG research correctly or that the sub-fund could have indirect exposure to issuers who do not meet the relevant criteria.

Due diligence

Each asset in the portfolio has its sustainability performance reevaluated using the sustainability framework once a year by our investment team.

Engagement policies

The sub-fund applies the Vontobel Asset Management voting and engagement policies. For the equity funds, voting rights are executed under the responsibility of the portfolio manager, by using proxy service providers for research, voting recommendations and voting administration. Bond investors do not have voting rights. Engagement is part of the ESG research process. It includes communications between the ESG research team and the management teams of investee companies, typically in case of specific issues ore controversies that may cover ESG concerns.

Designated reference benchmark

This sub-fund does not have a designated reference ESG benchmark, but applies a conventional benchmark whose construction does not take into account ESG criteria.