Asset classes

Targeting a positive return under all market conditions by identifying mis-pricing opportunities largely in short-dated higher quality global convertibles.

Investment strategy

The Fund adopts an absolute return strategy which aims to achieve a positive return under all market conditions. The fund takes long and short positions with a focus on shorter-dated, high quality issues and is globally positioned.

The aim is to seek out pricing inefficiencies in the global convertibles market by combining a screening process to identify attractively valued (or for a short position, the most expensive) convertible securities that offer the most compelling risk/reward profile in the investment manager’s experience and judgement.

We seek to extract value through active security selection by identifying convertible bonds that offer a discount to their implied value, have an attractive yield, offer high liquidity and are large in issue size.
In addition we hedge part of our equity and credit exposure to manage risk thus broadening the investable opportunity set. There is an emphasis on identifying and capturing asymmetric return opportunities – aiming to capture a substantial degree of equity upside while avoiding much of the downside risk. Historically, convertible bonds have tended to participate in 75% of the equity upside with only 45% of the downside risk.*

Portfolio applications

The fund can be applied to traditional credit or balanced portfolios, or to portfolios comprising absolute return funds. Its key aims are to:

• Provide returns similar to equity income but with lower volatility
• Enhance credit portfolio returns for a marginal increase in risk
• Increase returns without increasing risk
• Reduce portfolio risk without compromising returns

* Past performance is no guarantee of future performance.