Trading Updates 14/02/2020
Trading Update - 14 February 2020
Further trades have taken place in the funds in February 2020.
Following the rally in risk asset prices we have top sliced our exposure to equities somewhat; reducing exposure to passive vehicles replicating indices in European, Emerging market and US equities. This is a tactical move reflecting the risks that (a) the near term economic impact of the novel Coronavirus may be greater than currently priced in, and (b) reported infections outside China could start to accelerate.
In cutting our equity exposure, we have reduced our positions in Sterling hedged share classes in order to reflect the view that the differences between the UK and European Union Brexit negotiating positions will be thrown into sharp relief over the next month or so, and this could undermine Sterling.
Proceeds raised have been used to increase exposure to infrastructure, gold and cash.
Purchase – TwentyFour Income Fund
We have purchased the TwentyFour Income Fund, a London-listed closed-ended investment company focusing on European asset-backed securities, for the Managed Income and Defensive funds.
We believe the European structured credit market currently offers standout absolute and relative value within global credit markets. The £645m company, which originally listed on the main market of the London Stock Exchange in 2013, is managed by the highly regarded ABS team at TwentyFour Asset Management and has delivered attractive returns to shareholders since launch.
The underlying portfolio comprises investments issued by banks and other financial institutions that are principally secured against UK and EU residential mortgages and corporate loans, and generates a floating rate income yield in excess of 7%. The company aims to generate net total returns of 6-9% per annum and a pay a minimum dividend yield to shareholders of at least 6%.
Cornelian Investment Team