Meet Douglas

With the Middle East conflict clouding the outlook for inflation and interest rates, TwentyFour Asset Management’s Doug Charleston explains why asset-backed securities (ABS) could be a valuable diversifier for fixed income investors looking to deal with further volatility.

Historically, one of the key sources of stability in European ABS has been ratings. The market has long seen upgrades consistently outnumber downgrades, even during periods of stress, most recently during Covid-19.

TwentyFour Asset Management’s Douglas Charleston highlights 2025 as another year in which European ABS delivered solid positive returns over risk-free rates, with lower-than-expected volatility despite ongoing geopolitical uncertainty.

The $5.2tr asset-backed finance (ABF) market represents a growing opportunity to gain exposure to high quality loan pools and the returns they can generate.

Markets settled down last week thanks to the absence of headlines around tariffs. There is a universal acceptance that uncertainty and volatility will remain, though a series of constructive data prints relating to inflation and labour markets have now been navigated, and investors are shifting their focus to how central banks will weigh up the growth and inflationary impact of tariffs at the next round of meetings.

As the fourth quarter of 2024 comes to a close, TwentyFour Asset Management’s Douglas Charleston reflects on the past year’s events and explains why, in his view, the record supply of European ABS and CLOs in 2024 is likely to be matched in 2025.