- Managed by Danilo Rippa who is supported by a core team of three dedicated analysts/asset managers, all of whom have deep asset class specific expertise and significant experience in structuring and originating convertible bonds
- Actively managed regional allocation aimed at maximising risk adjusted returns+
- Multi-layered risk management process with embedded risk manager and independent risk oversight
- The team leverages the Man GLG equity and trading platform which supports and complements idea generation
The strategy seeks to outperform the Thomson Reuters Global Focus Hedged Convertible Bond Index (USD) with a corresponding level of risk by investing globally in an actively managed portfolio of, predominantly, convertible bonds.
In order to achieve its objective, the team aims to source and target alpha through a number of channels. These include:
- Security selection
- Inclusion in the convertible index
- Where multiple tranches exist exposure is optimised through the security that provides the best risk/reward
- Focus on idiosyncratic opportunities which provide outsized returns
- Sector rotation, which will be influenced by
- Macroeconomic dynamics and changes in regulation or legislation
- Primary market trends
- Sector specialists - useful additional support
- Positioning relative to the Reference Index
- Defensively or aggressively at a given point in time in terms of equity exposure and credit risk
- Geographical diversification
- Macroeconomic dynamics
- Regional convertible market valuation profile
- Regional primary market dynamics
- Flexibility to use options or ASCOTS
- Where appropriate, on valuation grounds, to reduce credit risk.
|Asset Class||Fixed Income|
|Reference Index||Thomson Reuters Global Focus Hedged Convertible Bond Index (USD)|
Performance by calendar years
Past performance is not indicative of future results. Returns may increase or decrease as a result of currency fluctuations.
Please note that the performance data is not intended to represent actual past or simulated past performance of an investment product. The data is calculated in USD and is based on a representative investment product or products that follow the strategy. An example fee load of 1.50% has been applied. The Thomson Reuters Global Focus Convertible Hedged USD Index is selected by the Strategy Manager/s for performance illustration and comparison purposes only. It is not a formal benchmark and does not form part of the strategy’s objectives. ML300 Convertible Index is used from 15 March 1999; then the UBS Global Focus CB Hedged Index is used from 1 June 2009 to 30 June 2014 and the Thomson Reuters Global Focus Hedged Convertible Bond Index (USD) from 1 July 2014 onwards.
Danilo Rippa and Gil Song discuss convertible bonds as an asset class; the case for convertible bonds in today’s investment environment; and investing long/short through convertible arbitrage.
We have a positive outlook on convertible bonds for three reasons: downside risk mitigation, a cheap entry point and improving liquidity.
Man offers a comprehensive suite of investment solutions and formats that can be tailored and optimised to meet specific client needs. Our investment solutions offer optionality including: liquidity, control, investment restrictions, investor customisations and transparency.
Access to investment products and mandate solutions are subject applicable laws and regulations including selling restrictions and licensing requirements. Investment solutions listed above may not be compatible for all investment strategies and may be subject to minimum subscription requirements. Regional Funds: In additions to UCITS and AIFs registered across the EEA, a number of investment strategies are available in vehicles registered in Chile, Netherlands, Hong Kong, Japan, Singapore, South Korea and Switzerland.
One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:
Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.
Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.
Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.
Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.
Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..
Financial Derivatives - The Strategy may invest in financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) typically for hedging purposes. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The use of FDI may multiply the gains or losses.
Emerging Markets - The Strategy may invest a significant proportion of its assets in securities with exposure to emerging markets which involve additional risks relating to matters such as the illiquidity of securities and the potentially volatile nature of markets not typically associated with investing in other more established economies or markets.
Non-Investment Grade Securities - The Strategy may invest a significant proportion of its assets in non-investment grade securities (such as “high yield” securities) are considered higher risk investments that may cause income and principal losses for the Strategy. They are instruments which credit agencies have given a rating which indicates a higher risk of default. The market values for high yield bonds and other instruments tend to be volatile and they are less liquid than investment grade securities.