September 2017
Convertible Bonds: the better Multi-Asset Class
Multi-asset funds have been in high demand over the last few years, attracting record inflows. They have also dominated new business in Europe this year thanks to their product promise using diversification and active allocation, to limit volatility even when markets are in turmoil and to achieve long-term, attractive absolute returns. But this year they really have been tested, with mixed results. In an environment of volatile bond yields, many funds had problems, while others caught themselves on the wrong foot because of the strengthening of the euro. Convertibles, on the other hand, did much better in these unstable markets. This mix of shares and bonds is able to adapt flexibly to the respective market phase thanks to its “build-in” asset allocation. Depending on the development of the equity or bond markets the profile of the Convertibles investment changes.
