For our Q1 fixed income event, Mark Holman, portfolio manager at Vontobel boutique TwentyFour Asset Management, provided an update on the firm’s flagship, global unconstrained strategy, the Vontobel Fund – TwentyFour Strategic Income Fund.
PLEASE NOTE THE VONTOBEL FUND – TWENTYFOUR STRATEGIC INCOME FUND DISCUSSED HEREIN IS A LUX UCITS AND IS NOT AVAILABLE TO US PERSONS. IT IS USED FOR ILLUSTRATIVE PURPOSES ONLY AS A REPRESENTATIVE OF TWENTYFOUR’S STRATEGIC INCOME STRATEGY WHICH IS AVAILABLE ACROSS OTHER VEHICLES INCLUDING THOSE WHICH ARE AVAILABLE TO US PERSONS
Before delving into how current market dynamics have influenced the fund’s current positioning, Mark outlined which prevailing macro and investment themes the TwentyFour multi-sector bond team view as most consequential for investors.
Specifically, he covered how TwentyFour expects the divergence between monetary policy, economic fundamentals, and asset prices to end during 2022 and why this shouldn’t lead to a premature end to the present cycle.
In addition, with central bank policy an increasing preoccupation for investors, Mark explained how TwentyFour view the likely policy trajectory for the Federal Reserve, the Bank of England and the European Central Bank and forecasted the possible destination of each central bank’s primary policy rate over 2022.
While TwentyFour Asset Management believes credit spreads may struggle during the first half of 2022, Mark offered several reasons why he thinks investors should consider any credit volatility or spread widening as an intra-cycle dip and a potential buying opportunity.
Moreover, he also outlined which fixed income sectors the TwentyFour multi-sector bond team believe appear most attractive given present market dynamics before outlining TwentyFour’s anticipated strategy for managing the expected headwinds.
Finally, Mark answered questions from attendees and covered whether he thinks the Fed might make future policy errors if it raises rates too quickly, how he expects the Fed will implement quantitative tightening and why TIPs and other inflation linked bonds may not represent a good asset choice for investors, amongst other topics in a broad ranging Q&A.
