TwentyFour Select Monthly Income Fund Ltd (LSE:SMIF) Chair Ashley Paxton and Portfolio Manager Eoin Walsh talked with Proactive at the One2One Investor Forum about the fund’s income strategy, portfolio positioning and outlook for fixed income markets.
Paxton explained that the fund, launched in 2014, invests across the fixed income spectrum with a particular focus on less liquid bonds. The fund has grown from £100 million at inception to around £305 million, while continuing to trade at a premium. Its dividend policy remains central to its proposition, with a minimum target of 6p per share annually and distributions made monthly.
Walsh explained how the strategy seeks higher yields from less liquid fixed income securities without necessarily increasing underlying credit risk. He said the fund’s current mark-to-market yield was just under 8.5%, while its positioning remains relatively short-dated. The portfolio is currently favouring higher-rated credit, including European banks, insurers and CLOs, while remaining cautious about lower-rated high-yield debt, chemicals, commercial real estate and parts of the US insurance market.
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