TwentyFour Select Monthly Income Fund (SMIF) has reported total annual dividend of 7.3p per ordinary share, exceeding its 6p target, its latest annual results have revealed.
The London-listed closed-ended fund, which invests in credit securities, has gone from “strength to strength”, the company said, with total net assets rising from £219.77m in 2024 to £272.7m. SMIF traded at an average premium to net asset value (NAV) of 2.09 per cent during the period, in contrast to the wider investment company sector, which traded at a discount.
NAV per ordinary share increased to 86.06p, up from 83.70p in the previous year. However, the fund’s NAV return per share was 12.22 per cent, down from 22.56 per cent in 2024.
The period saw the portfolio reach its highest average credit rating since initial public offering, with exposure to higher-quality assets delivering stronger income, SMIF said.
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“SMIF has gone from strength to strength during the year,” said Ashley Paxton, chair of SMIF. “The company has been one of the most prolific issuers of shares in the sector, issuing 54.315m ordinary shares over the period at a two per cent premium, prior to issue costs, to the NAV at issue date, taking total ordinary shares in issue to 316.89m.”
SMIF said its portfolio continued to benefit from strategic exposure to collateralised loan obligations (CLOs), which returned 13.75 per cent. This was driven by CLOs benefiting from the higher-rate environment, the fund said.
Subordinated financials also performed well, supported by strong earnings from European banks. US and European high-yield assets delivered strong returns of 13.75 per cent and 10.03 per cent, respectively, SMIF said.
“Higher-for-longer interest rates and robust earnings from European banks have informed our decision to maintain the portfolio’s overweight exposure to CLOs and subordinated finance,” said George Curtis, portfolio manager at SMIF. “At the same time, all sectors held in the portfolio contributed positively to performance, supported by strong fundamentals in the credit sector.”
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Looking ahead, SMIF said that, given current yield expectations, the year ending 30 September 2026 could also produce an income above the dividend target of 6p per ordinary share.
The fund added that, despite concerns over US trade policy, fiscal spending, and some softness in the labour market, the outlook for the credit market remains positive.
“However, given elevated macroeconomic risks we are not complacent and continue to build a portfolio of high-conviction credit that we can hold through the cycle, while maintaining the highest average credit rating the fund has ever had,” Curtis added.
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