TwentyFour Earnings Fund (TFIF) has declared a document dividend for 2024, because of a powerful portfolio efficiency boosted by a buoyant asset-backed securities (ABS) market.
The FTSE 250-listed funding firm, which invests in much less liquid ABS within the UK and Europe, has introduced a remaining dividend of 5.07p, bringing the full for the 12 months to 11.07p.
This represents a ten.3 per cent yield and is nicely forward of the 8p goal.
Learn extra: TwentyFour Earnings Fund experiences “buoyant” first half
The fund, which is managed by TwentyFour Asset Administration, mentioned that its portfolio delivered a powerful efficiency, with a NAV per share whole return together with dividends of 16.92 per cent throughout 2024 and 1.76 per cent year-to-date to 4 April 2025.
TFIF famous that the ABS market has skilled document issuance over the previous 12 months, as banks flip to the sector to assist their funding efforts after central banks’ quantitative easing programmes have been tapered.
Elevated issuance has led to a bigger pool of securities obtainable for funding, which has contributed to an general enchancment in common asset high quality, based on TFIF.
Learn extra: ABF an “evolutionary step” for personal debt traders
The vast majority of the fund’s portfolio is allotted to residential mortgage-backed securities and collateralised mortgage obligations (CLOs) within the UK and Western Europe.
“The ABS market has carried out strongly over the previous 12 months, with exceptionally excessive ranges of issuance contributing to a considerable enhance in market measurement, notably in CLOs and vital threat switch transactions,” mentioned Aza Teeuwen, companion and portfolio supervisor at TwentyFour.
“This has allowed us to extend our publicity to each greater high quality and a extra diversified pool of belongings.
“On the similar time, market volatility is creating some glorious alternatives that we’re in a position to make the most of on account of our technique of sustaining each liquidity and adaptability within the portfolio. Coupled with elevated rates of interest, we’re optimistic that we are going to proceed to ship future revenue for shareholders.”
Learn extra: Asset-backed finance particular report: Driving the wave
Deutsche Numis analysts mentioned that TFIF is “a horny fund for revenue traders that has demonstrated its credentials as a floating price fund since inception”.
“The managers used the interval of unfold tightening to derisk the portfolio, and while seeing alternatives within the present market, they continue to be extremely selective with firepower to deploy if markets turn out to be careworn,” the analysis added.
Shares have been up by 2.6 per cent to 110.4p by market shut on 10 April.
