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TwentyFour Dynamic Bond
TwentyFour Dynamic Bond has a very flexible approach in order to take advantage of changes in market conditions. It may invest across the whole range of fixed interest assets. The income produced is usually one of the highest in the sector, but will fluctuate as investments and market conditions change.
Our opinion
A highly professional team run this very focused strategic bond fund. TwentyFour Dynamic Bond pays an attractive yield and is managed with an emphasis on credit risk to ensure protection of investors' capital and income wherever possible. This fund differs from most strategic bond funds due to a consistent weighting to asset-backed securities, an area in which the team specialises.
Company description
TwentyFour Asset Management is an independent fixed income firm, founded in 2008 by a group of leading specialists. It offers highly transparent products that benefit from a rigorous detail-orientated investment approach to achieve superior risk-adjusted returns.
Fund manager
Gary Kirk spent the first 20 years of his career as a successful credit trader. He then became a portfolio manager, during which time he traded the complete range of fixed interest securities and derivative products. He has previously worked for both Royal Bank of Canada and Wachovia, now part of Wells Fargo. Although Gary is the lead manager, TwentyFour follows a team approach in managing funds.
In the current market place it helps to be an experienced crafty cockney with a focus on relative value!
Gary KirkFund manager
Investment process
The investment approach for TwentyFour Dynamic Bond fund has a very strong focus on liquidity, and the separation of credit and interest rate risk. The team believes that opportunities can be found among lower rated (i.e. higher risk) bonds and that fewer analysts have the expertise to research them thoroughly. The team’s specialist skills mean that it can, and will, invest in areas of the market where others may fear to tread, such as subordinated financial debt and asset-backed securities. It has a highly flexible approach that enables the team to take advantage of prevailing market conditions as they change over time. The fund will also use derivatives, such as interest rate and credit derivatives, to optimise exposure or reduce it, depending on the market environment.
ESG
ESG - Integrated
TwentyFour has a robust ESG framework which is integrated throughout the investment process for its funds. With this fund, Chris and his team are directly responsible and accountable for the analysis: there is no reliance on third party analysts or a separate ESG team within the firm.
As a specialist fixed income investor, the priority is to ensure bond coupons and principals are paid, and the team sees ESG as a risk to this goal like any other. All ESG factors are considered, however Chris has a particular focus on governance with this fund. The ESG integration model also incorporates more nuanced factors such as controversies, engagement and momentum, which Chris feels best reflects TwentyFour’s approach as an active manager. This means that ESG analysis is embedded into every stage of the investment process, to achieve two main objectives: enhancing investor returns, and playing its part in promoting better societal and environmental outcomes.
Risk
The focus of TwentyFour Dynamic Bond fund is on credit risk - i.e. how likely is it that interest and capital payments will be made on time. The six-strong team also have the flexibility to use the entire spectrum of the bond market. This requires particularly meticulous due diligence, which, fortunately, the team do extremely well.
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