TwentyFour Income Fund (TFIF) has declared a record dividend for 2024, thanks to a strong portfolio performance boosted by a buoyant asset-backed securities (ABS) market.
The FTSE 250-listed investment company, which invests in less liquid ABS in the UK and Europe, has announced a final dividend of 5.07p, bringing the total for the year to 11.07p.
This represents a 10.3 per cent yield and is well ahead of the 8p target.
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The fund, which is managed by TwentyFour Asset Management, said that its portfolio delivered a strong performance, with a NAV per share total return including dividends of 16.92 per cent during 2024 and 1.76 per cent year-to-date to 4 April 2025.
TFIF noted that the ABS market has experienced record issuance over the past 12 months, as banks turn to the sector to support their funding efforts after central banks’ quantitative easing programmes were tapered.
Increased issuance has led to a larger pool of securities available for investment, which has contributed to an overall improvement in average asset quality, according to TFIF.
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The majority of the fund’s portfolio is allocated to residential mortgage-backed securities and collateralised loan obligations (CLOs) in the UK and Western Europe.
“The ABS market has performed strongly over the past 12 months, with exceptionally high levels of issuance contributing to a substantial increase in market size, particularly in CLOs and significant risk transfer transactions,” said Aza Teeuwen, partner and portfolio manager at TwentyFour.
“This has allowed us to increase our exposure to both higher quality and a more diversified pool of assets.
“At the same time, market volatility is creating some excellent opportunities that we’re able to take advantage of as a result of our strategy of maintaining both liquidity and flexibility in the portfolio. Coupled with elevated interest rates, we are optimistic that we will continue to deliver future income for shareholders.”
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Deutsche Numis analysts said that TFIF is “an attractive fund for income investors that has demonstrated its credentials as a floating rate fund since inception”.
“The managers used the period of spread tightening to derisk the portfolio, and whilst seeing opportunities in the current market, they remain highly selective with firepower to deploy if markets become stressed,” the research added.
Shares were up by 2.6 per cent to 110.4p by market close on 10 April.
