Investment Grade

Vontobel Fund - TwentyFour Sustainable Short Term Bond Income

ISIN
LU2081487709
Valor
51155828
Sedol
BL4KM51

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.

101.48
NAV
0.13%
Performance YTD
As at 7 Dec 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)

esg - image

*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 29 Oct 2021 unless otherwise indicated.

Fund performance

Cumulative performance

1M YTD Since Inception
HI (hedged) USD -0.5% 0.1% 1.5%

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
HI (hedged) USD NA NA NA NA 1.3%

Performance for calendar years

Volatility & risk

Portfolio
Volatility
Sharpe Ratio 1.0
Information Ratio
Modified Duration 1.9
Average Maturity 1.3
Average Coupon 3.7%
Yield To Maturity 2.7%
[1 year]

All data is as at 7 Dec 2021 unless otherwise indicated.

Fund data
Portfolio Manager TwentyFour Asset Management LLP
Fund Domicile Luxembourg
Fund Currency GBP
Share Class Currency USD
End of fiscal year 31 August
Share Class Launch date 27 Aug 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 CH, GB, LI, LU, SG
Nav Information
Highest since launch 102.37
Lowest since launch 100.00
Fund size in mln. GBP 466.15
Share class size in mln. USD 1.80
Fees And Expenses
Management fee 0.40%
Performance fee 0.00%
TER* 0.53% (28 Feb 2021)
Identifiers
ISIN LU2081487709
Valor 51155828
Bloomberg VTBHIHA LX
SEDOL BL4KM51
WKN A2QB6U
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
AN GBP LU2386632371 Dist Retail 4 Oct 2021 0.40%
AQG GBP LU2081485596 Dist Institutional 22 Jan 2020 0.25% 0.35% 28 Feb 2021
AQHNG (hedged) EUR LU2081486487 Dist Retail 5 Nov 2021 0.25%
AQHNG (hedged) USD LU2403268092 Dist Retail 5 Nov 2021 0.25%
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
HNG (hedged) USD LU2386631993 Accum Retail 4 Oct 2021 0.25%
HNG (hedged) EUR LU2081486214 Accum Retail 4 Oct 2021 0.25%
NG GBP LU2081485323 Accum Retail 22 Jan 2020 0.25% 0.39% 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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