Ivan Nikolov,
Co-Head Convertible Bonds
T +41 44 284 28 80
ivan.nikolov@fam.ch
Ivan Nikolov,
Co-Head Convertible Bonds
T +41 44 284 28 80
ivan.nikolov@fam.ch
The traditional 60/40 allocation between equities and bonds remains widely popular and utilised among (professional) investors. However, with a few tweaks, namely adding a moderate allocation to convertible bonds, this trusty staple of the asset management world can yield superior results without losing any of its advantages.
In the middle of the ongoing monetary policy debate, geopolitical uncertainty and AI boom, the convertible bonds (CB) asset class recently passed an important milestone: The 30-year anniversary of the most popular CB index family. While CBs have been used as a financing tool by corporations since the 19th century, the past 30 years have clearly demonstrated how convertibles can enhance the returns of balanced stocks/bonds portfolios without adding leverage or increasing volatility.
Time to discuss CBs and their use cases: as a strategic addition to classic portfolios, as a tactical allocation during specific times in the business cycle – and of course as a source of alpha, given your chosen active manager possesses the relevant skills.