Vontobel TwentyFour Strategic Income Fund

Investment rationale

This is an actively managed global bond fund designed to provide an attractive level of income together with the opportunity for capital growth. It is classified as low risk on the 1-to-7 summary risk indicator scale, with an SRI of 2, and the recommended holding period is 5 years. The Sub-Fund is intended for retail investors with knowledge and/or experience of these types of products, a medium- to long-term investment horizon, and the ability to bear losses up to the amount invested. Its role is differentiated by its flexible use of global credit, including high yield, ABS, MBS, AT1, RT1, Tier 2 and CoCo bonds, with the ability to position for both rising and falling interest rates.

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How the strategy works

The fund’s objective is to achieve an attractive level of income along with the opportunity for capital growth. It invests worldwide, including emerging markets, in fixed-interest and floating-rate securities such as government, supranational and corporate bonds, contingent convertible bonds, and asset-backed securities including mortgage-backed securities; it may invest across all credit ratings, including high yield. Limits include up to 49% of net assets in CoCo bonds, 20% in ABS including MBS, up to 10% in UCITS/UCIs, no more than 5% in distressed securities, and up to 20% in bank deposits at sight, while in exceptionally unfavorable market conditions it may hold up to 100% in money-market instruments and bank deposits at sight. The AQHN EUR share class is hedged against the Sub-Fund’s main currency and distributes income quarterly. The fund may use derivatives for investment and hedging purposes and is not managed to a benchmark. The recommended holding period for the AQHN EUR share class is 5 years.

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Investment philosophy

• The investment universe is global fixed income, including government, supranational and corporate issuers, and spans fixed-interest and floating-rate securities across the rating spectrum, including high yield, ABS, MBS, AT1, RT1, Tier 2 and CoCo bonds.

• The investment team identifies relative-value opportunities through rigorous economic, technical and credit analysis, and the portfolio manager has full discretion within predefined investment limits because no benchmark is used.

• The process is flexible and aims to benefit from both rising and falling interest rates; derivatives may be used to achieve the investment objective and for hedging purposes, while the EUR share class is continually hedged against the Sub-Fund’s main currency.

• Sustainability is integrated through specific criteria that combine the promotion of environmental and/or social characteristics with a commitment to sustainable investments, with at least 15% of net assets invested in sustainable investments.

• Positioning at 31 August 2026 was concentrated in banking, government and ABS, with regional exposure mainly to Europe, the US and the United Kingdom; the largest disclosed holdings include DBR 2.9 02/15/36, T 4 3/8 05/15/36, T 4 1/4 08/15/35 and BTPS 3.8 07/01/36, and limits include up to 49% in CoCo bonds, 20% in ABS/MBS and 5% in distressed securities.

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Distinctive features

The fund stands out for its broad and flexible fixed-income toolkit, combining traditional sovereign and corporate bonds with structured credit and bank capital instruments such as ABS, MBS, AT1, RT1, Tier 2 and CoCo bonds. It also has the ability to move defensively, including holding money-market instruments and sight deposits in exceptionally unfavorable market conditions. The EUR share class is currency-hedged against the Sub-Fund’s main currency, and the fund offers daily redemption while remaining swing-pricing eligible. Its Article 8 SFDR classification and minimum 15% allocation to sustainable investments are explicit structural features of the strategy.

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Risks

The fund has a summary risk indicator of 2 out of 7. It does not include capital protection, and investors could lose some or all of their investment. Risks include market risk, fixed income risk, credit risk, interest rate risk, liquidity risk, performance risk and operational risk, together with high yield investment risk, contingent convertible bond risk, emerging markets risk, currency risk and currency trading risk. Additional risks arise from the use of derivatives and leverage, as well as legal and sustainability risks not captured in the summary risk indicator. These risks are linked to the fund’s global credit approach, its ability to invest in lower-rated bonds, CoCo bonds, ABS and MBS, and its use of currency hedging and derivatives.

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Asset manager

The management company is Vontobel Asset Management S.A., based in Luxembourg, and the investment manager is TwentyFour Asset Management LLP. Vontobel Asset Management S.A. is part of Vontobel Group and is authorized in Luxembourg and supervised by the CSSF. TwentyFour Asset Management LLP is registered in England and authorized and regulated in the UK by the Financial Conduct Authority, with its registered office at 4th Floor, 20 Fenchurch Street, London, EC3M 3BY. The fund is a Luxembourg-domiciled UCITS sub-fund of the Vontobel Fund umbrella and is categorized under Article 8 SFDR.

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