Twentyfour Select Monthl... Share Discussion Threads

[cwa1] 13/6/2023 16:28

Dividend Policy

The Board believes that the monthly dividend will be a minimum of 0.5p per
Ordinary Share. The Board intends within the final interim dividend of each
financial year to distribute an amount equal to the value of any net income of
the Company for that financial year remaining after payment of the monthly
dividends.

The dividends declared for the period totalled 3p per share. At present, the
possibility of the Company declaring total dividends of at least 7p per share
for the current financial year is very likely.

[spangle93] 08/6/2023 15:41

I guess the ex-div around the middle of October is the one to watch...

Good to see the discount close, though it would have been nicer to see the NAV increase with the share price

[cwa1] 08/6/2023 13:17

Let's go round again...

Re: Dividend Announcement

The Directors of TwentyFour Select Monthly Income Fund Limited have declared
that a dividend will be payable, in line with the Prospectus, representing the
regular monthly targeted dividend for the financial period ending 31 May 2023 as
follows:

Ex-Dividend Date 15 June 2023

Record Date 16 June 2023

Payment Date 30 June 2023

Dividend per Share 0.50 pence (Sterling)

[marktime1231] 07/6/2023 12:56

A fair attempt at closing the discount gap, but some way to go to restoring the premium.

[marktime1231] 06/6/2023 16:56

Is the completion of BoE corporate bond auction easing things here?

[aishah] 30/5/2023 15:24

Tender offer:

The company has announced it intends to purchase up to 20% of the issued share capital at a price based on the Net Asset Value (NAV). The tender price will be set at a 2% discount to the 30 June 2023 NAV. Tender elections in excess of your basic entitlement may be subject to pro rata scaling back

[ramellous] 19/5/2023 10:17

Some good results today from Nationwide building society. SMIF’s top debt holding

[catch007] 16/5/2023 16:40

I added a few more at 0.715 today to catch the ex div date this week, helps my regular income flow. I understand the downward pressures however still seems a reasonable entry point given the yield.

[cwa1] 11/5/2023 14:41

Re: Dividend Announcement





The Directors of TwentyFour Select Monthly Income Fund Limited have declared
that a dividend will be payable, in line with the Prospectus, representing the
regular monthly targeted dividend for the financial period ending 30 April
2023 as follows:



Ex-Dividend Date 18 May 2023

Record Date 19 May 2023

Payment Date 2 June 2023

Dividend per Share 0.50 pence (Sterling)

[marktime1231] 10/5/2023 16:39

Well, no question, that is a very harsh criticism. The underlying investments are not expensive, actually the opposite. SMIF are confident in their strategy, believe they are backing debt assets which will survive the economic cycle, and have stuck to their core plan while pretty agile in the market place. 72p is cheap from all perspectives, time will tell.

[cc2014] 10/5/2023 13:37

Comparing SMIF with TFIF is not appropriate. They are invested in different things and have different objectives.


It is easy to argue that the fall in share price and NAV is a result of rising interest rates but the fund has been completely on the wrong side of the move.

They could have invested in a bond with a 5 year maturity instead which would have redemmed at par. They could have invested in shorter duration at the top of the cycle. They could have invested in some floating rate debt. These were all choices and they got them wrong.


So, we now come to a point where we are getting closer to the turn in interst rates and this will certainly help. But, I am not enthused because the prices the underlying instruments are trading at are too high and these at some point have to return to normal.

What price a fund for a fund where the NAV has fallen 28% in 7 years? Well it's going to have to be more than a couple of percent discount for me, because I don't think the investment manager has a grip on the bigger picture.

[marktime1231] 10/5/2023 11:33

Is that a bit harsh? Criticising SMIFs total return over ten years while it is temporarily (!) at the bottom of a trough caused by the tripple whammy of increased uncertainty of defaults as interest rates have risen, Truss-Kwarteng suddenly making low-risk debt attractive on a risk-reward basis, and the recent CS AT1 default. It does not help that SMIF is primarily invested in finance sector debt where the pain is most acute.

To illustrate the consequence its major holding in Nationwide 10.25% notes has fallen from 160p+ to 120p-. But no-one is seriously expecting Nationwide to default, are they, in a scenario where economies suffer no worse than a shallow recession, employment rates are holding up, and where interest rates stabilise and then fall back?

Until recent events SMIF was still trading at a healthy premium and was expanding rapidly thanks to the availability of bargains and strong corporate investor demand. I imagine income performance to be excellent as a result.

In more normal times SMIF has typically traded around the mid-90s, you would make your money back in the first year. That said my holdings are underwater, and would be deeply loss-making on paper but for trading the average price down to around 80p.

If you had the umph to invest in SMIF in the low 70's what would you be saying about total returns in two or five years time when the share price has restored to the 90s? The unusual discount is inviting right now, you can buy some under 72p this morning which would otherwise be trading at 80p. An ideal get rich slowly scheme. I will continue to invest here as funds become available.

[speedsgh] 10/5/2023 08:56

Interesting post @spangle93. I do not hold SMIF but I see that it launched in March 2014 so the majority of its existence has been during the ZIRP era which helped to inflate the values of its constituent holdings. This has obviously unwound fairly spectacularly over the past 12-18 months and, looking at its chart since launch, one can see that (ignoring the spike down at the onset of Covid), the worst of its share price (and presumably NAV) falls have occurred in sync with the rise of interest rates. Whilst I do not expect a return to the ultra-low interest rates of the past decade, once rates stabilise and maybe fall back a little, I suspect that the current NAV/share price will indeed prove to be fairly near the bottom of the current cycle. AIMHO

edit - I note that total returns (both NAV & share price) have been superior at TFIF over virtually all timescales

TFIF -
SMIF -

[ramellous] 10/5/2023 08:44

It’s a bond fund paying a similar coupon every year. The risk free interest rate has gone up so the nav and share price has reduced to reflect this. Like all bonds the price coming down has meant the yield has risen. That’s how I see it. It’s paying nearly a 9% yield at todays price and I buy more every month.

[spangle93] 10/5/2023 08:20

Been looking at SMIF for some time, from an income perspective. It's currently at a discount to NAV, which is rare

However, since inception, the NAV and share price has fallen about 30% which offsets the income so that total return is less than 4% annualised, or less than I could currently get from a fixed rate bond from many banks. I'm not sure I understand why NAV has consistently fallen

Do people here see the NAV / share price as being at the bottom of a cycle which will unwind positively as inflation and bank interest rates fall? Or is there some other explanation?

TIA

[marktime1231] 21/4/2023 13:19

Yes I was basing my hopes on the fact that SMIF say they have been taking advantage of high yielders at exceptional discounts, and were until recently issuing significant volumes at a slight premium. Net income must be up.

I am also wondering if we have hit the bottom of the latest dip caused by the Credit Suisse AT1 default etc. Probably too early to be confident but I detect a slight improvement in underlying debt prices. If so we can expect the unusual discount here to turn back in to a premium, and the restart of a slow recovery to 80p.

Fully loaded up on SMIF in my SIPP and my ISA, but I might be persuaded to add a few more if there is a prospect of 1p+ final. If there is a surplus SMIF have to pay out don't they? Might we get a clue from interim results in about a month's time?

[scburbs] 21/4/2023 10:15

TFIF is all floating rate whereas SMIF is substantially fixed so I can't see it being on that scale. They have raised a reasonable amount of new capital which was probably deployed at higher yields, so maybe a small improvement on previous year.

[marktime1231] 20/4/2023 16:28

A rather splendid bonus in TFIFs final dividend, can we hope for something similar in SMIFs final dividend in October?

[cwa1] 13/4/2023 15:31

The Directors of TwentyFour Select Monthly Income Fund Limited have declared that a dividend will be payable, in line with the Prospectus, representing the regular monthly targeted dividend for the financial period ending 31 March 2023 as follows:

Ex-Dividend Date 20 April 2023
Record Date 21 April 2023
Payment Date 5 May 2023
Dividend per Share 0.50 pence (Sterling)

[ramellous] 25/3/2023 17:47

An interesting webinar from SMIF addressing the recent palaver.

[my retirement fund] 21/3/2023 16:56

I suspect there will be years of litigation and damages the Swiss will be facing

[aishah] 21/3/2023 12:15

The Swiss chose to wipe out CS' AT1s. The statement from ECB is clear:
"Common equity instruments are the first ones to absorb losses, and only after their full use would Additional Tier One be required to be written down. This approach has been consistently applied in past cases and will continue to guide the actions of the SRB and ECB banking supervision in crisis interventions."

[my retirement fund] 21/3/2023 11:30

reassuring company statement

Company update following Credit Suisse takeover

Markets were digesting the ramifications of the actions of the Swiss
authorities on Sunday evening, as FINMA, the Swiss regulator, has overseen the
takeover of Credit Suisse by UBS, which included a payment to equity holders,
while AT1 debtholders are wiped out, which is unprecedented.

However, other regulators have been quick to highlight the differences in their
regimes, with the ECB and BOE releasing statements already highlighting the
seniority waterfall - and reaffirming that AT1s clearly rank ahead of equity
holders. These statements have, in turn, helped to support the markets for
European banks. The market for AT1s on Monday morning had been lower by
15-20pts, but recovered to be down by 3-7pts by close yesterday, depending on
Issuer. With prices for AT1s another 3-5 points higher today, valuations seem
to be stabilising.

The TwentyFour Select Monthly Income Fund Limited (LSE: SMIF) does have a small
amount of exposure to Credit Suisse Senior Unsecured bonds, which have not been
impacted by the changes, and did not hold any Credit Suisse AT1 bonds.
Furthermore, the Fund does not hold debt from any other Swiss banks. The Fund
does have exposure to other AT1s, and currently holds 25.3% in this asset
class, with 8.2% exposure to other, non-AT1 bank debt (which includes the
Credit Suisse Senior Unsecured bonds).

TwentyFour Asset Management LLP (the Portfolio Manager) believe the rationale
for holding European and UK subordinated debt is sound and was re-endorsed by
the Eurozone regulators yesterday, confirming that the seniority waterfall put
equity holders behind debt holders. The comment from ECB President, Christine
Lagarde, last night saying "Switzerland does not set standards in Europe", was
another strong statement about the difference in regulation in Europe.

[marktime1231] 20/3/2023 11:19

SMIFs direct exposure to CS, if any, will be less than 1% as has been discussed above. The point of the crash this morning is, however, that SMIF is heavily invested in junk-grade high yield in the European financial sector. The risk of these investments has increased in general terms even if SMIF doesn't hold cocos etc which are specifically at risk.

There has also been unreasonable derating of less risky investment grade bonds, perps etc and this is clobbering SMIF NAV. Or stretching further an already stretched discount in underlying holdings. Creating an exceptional buying opportunity in an already cheap market.

SMIFs response is superb. Call an EGM to get approval to issue another 20% more shares, having already issued a fresh 20% in the last year or so, to take advantage of increasing net margin opportunities. Institutional demand for SMIFs mostly safe stock paying 8% will be strong. Take your cue from management and hold your nerve.

Unfortunately it will take a while for the share price to recover but SMIF will be back on the path of steady improvement as soon as the panic settles down. Anyone here for the long term will not regret taking that rare chance to top up in the 60s.

[cc2014] 20/3/2023 09:20

I'm out now for a few quid. Decided I'd rather sit this one out and see what happens even if I miss out.