Twentyfour Select Monthl... Share Discussion Threads

[cc2014] 22/5/2022 11:56

#126

Sad to say I don't share your optimism. If we go back to my post 122 on Nationwide CCDS at a price of 165p and a coupon of 10.25%, this reflects a yield of 6.2%.

In order for SMIF to generate the current yield of 8% with a management fee of 1% then SMIF needs investments generating a 9% return. Which very broadly implies a capital loss of 2.8% a year on our sample of just one investment.

I would add that if the BOE interest rate continues up to 2.5% as currently predicted the value of SMIF's current investments are going to continue to fall.

I would concur that the new investments will be at a better yield but 9-10% is taking on a level of risk SMIF hasn't historically.

[marktime1231] 20/5/2022 14:16

One way to counter the falling price is to top up your holding. I added when the SIPP window opened and will go again next year.

Over the very long-term we can hope SMIF will cycle back towards 100p, and then we will be grateful of the chance to get some in the mid 80s. At some point SMIF in this inflationary cycle may find the opportunity to acquire 9-10% debt which meets their criteria. In the meantime it keeps a lid on the share price by issuing a few new shares at a premium. The market is not too worried about SMIFs outlook, is it. The extra distribution in month 12 might get cut, but even a flat 6p a year is 8% at this share price is top drawer. That is nearly keeping up with headline inflation.

Monthly!

So good in fact I may need to adjust other holdings and add some more.

[smidge21] 20/5/2022 06:47

One quick guide to how the assets are trading/ trending is to watch the FRED US high yield spread:



as yield goes up the price goes down.

US HY spreads have been widening - on recession fears and on the higher defaults possible from tighter US monetary policy. But if a proper recession does hit then this spread has much more to travel (look at max time period in chart)

NB SMIF has UK exposure but bond markets rarely move in opposite directions

[vas007] 16/5/2022 10:48

Thanks for the update. At least we could rely on the monthly income.

[8w] 16/5/2022 09:49

I think overall duration is low in this trust unlike say HDIV

[cc2014] 16/5/2022 09:35

#121

The share price is falling as the value of the underlying investments is falling.
In August last year the NAV was around 94p and has since tracked down to around 83p

The NAV has fallen mostly because of:
1. Valuations of bonds had been pushed up due the end of 2021 to crazy prices due to QE. All that money that was printed had to go somewhere including bonds.
2. Therefore the market wasn't appropriately reflected credit risk or interest rate risk.
3. The market is readjusting as interest rates are rising and risk of default is rising so bond values are falling.

An example might help. SMIF's largest holding at 4.3% of it's portfolio is Nationwide 10.25% CCDS. This instrument pays 10.25% dividends provided Nationwide does not get into financial trouble. It pays 10.25% in perpetuity regardless of the BOE interest rate. So, as interest rates are predicted to rise the price of this instrument has fallen.
The market was so overbought at the end of the year it was trading at around 190p. Now it is 165p.

Not all SMIF's investments are like Nationwide. Some are bonds with say 10 years to maturity, others mature in a couple of years but regardless all bonds have been falling some more than others. And all in one way or another are risky because that's they only way a 6% return is available when base rates were 0.1%

[vas007] 16/5/2022 08:38

Can you tell me why the share price keeps dropping ?

[cwa1] 12/5/2022 17:04

12 May 2022

TwentyFour Select Monthly Income Fund Limited

(a non-cellular company limited by shares incorporated in the Island of
Guernsey under the Companies (Guernsey) Law 2008, as amended, with registered
number 57985 and registered as a Registered Closed-ended Collective Investment
Scheme with the Guernsey Financial Services Commission. LEI:
549300P9Q5O2B3RDNF78)

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 29 April 2022
as follows:

Ex-Dividend Date 19 May 2022
Record Date 20 May 2022
Payment Date 6 June 2022
Dividend per Share 0.50 pence (Sterling)

[cc2014] 29/4/2022 16:02

Now now 85.63p and more equity raised at 87.38p.

Seems Twenty Four are more interested in their fee than the share price.

[cwa1] 13/4/2022 10:30

Took a while but they got there in the end:-

[cwa1] 12/4/2022 17:24

Thanks, much obliged. I sent them a message on the day it was announced but, as yet, haven't had any response

[marktime1231] 12/4/2022 17:20

Yes, no, I have written suggesting they inform the market.

[cwa1] 12/4/2022 17:13

Thanks for clarifying that. If I may ask, was that in a personal communication to you, or is it somewhere you can link to here?

Cheers

[marktime1231] 12/4/2022 16:37

24am have advised payment date will be 6 May.

[eithin] 10/4/2022 11:28

LATEST DIVIDENDS
Summary Previous dividend Next dividend
Status Paid Declared
Type Interim Interim
Per share 0.5p 0.5p
Declaration date 10 Mar 2022 (Thu) 07 Apr 2022 (Thu)
Ex-div date 17 Mar 2022 (Thu) 14 Apr 2022 (Thu)
Pay date 01 Apr 2022 (Fri) 29 Apr 2022 (Fri)

From Dividend Max Think 29th. possibly right.

[cwa1] 08/4/2022 07:36

That's probably the date I'd have guessed at, though with Easter in the mix POSSIBLY the week after?

Would be nice to be told for sure though ;-)

[eithin] 08/4/2022 07:20

Guess April 29th. ???

[cwa1] 07/4/2022 16:54

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 March 2022 as follows:

Declaration Date 7 April 2022
Ex-Dividend Date: 14 April 2022
Record Date 19 April 2022
Dividend per Share 0.50 pence (Sterling)

Perhaps we've to guess when the actual payment date is :-/

[marktime1231] 06/4/2022 13:39

Topped up SMIF in my SIPP this morning, looks like quite a few of you are doing the same.

[cwa1] 15/3/2022 17:07

And some more...

Issue of Shares

TwentyFour Select Monthly Income Fund Limited (LSE: SMIF) is pleased to announce that, to satisfy market demand and to raise money for investment in accordance with the Company’s investment policy, 725,000 new ordinary shares of 1 pence each in the capital of the Company were issued at a price of 88.02 pence per share (the “New Shares”), raising £638,145.00 (before costs and expenses) under the Block Listing.

[cc2014] 14/3/2022 15:42

NAV now 86.29 as of a few days ago. It seems they are going to carry out issuing shares imho until the premia is gone.

[cwa1] 14/3/2022 15:20

Issue of Shares

TwentyFour Select Monthly Income Fund Limited (LSE: SMIF) is pleased to announce that, to satisfy market demand and to raise money for investment in accordance with the Company’s investment policy, 500,000 new ordinary shares of 1 pence each in the capital of the Company were issued at a price of 88.02 pence per share (the “New Shares”), raising £440,100.00 (before costs and expenses) under the Block Listing.

[cwa1] 25/2/2022 14:08

Featured in this week's Shares magazine as a "BUY":-

Analysis by Numis
indicates the managers have
demonstrated a disciplined
approach to issuing new shares
and have only done so when
the capital can be deployed
to support the yield, which is
currently an attractive 7.2%.
This implies the managers
have a positive outlook and
see the capacity to deploy
fresh funds. Numis estimates
that historically, returns
generated from the start of
issuance have averaged 14%
over the following year.
The trust has delivered an
annualised return of 7.2% and
6.5% respectively over the last
three and five years.

[cwa1] 21/2/2022 17:36

And another million:-