This month the Dynasty Global Convertibles fund celebrates its 5th anniversary with over 300 million euro in AUM and a 4 star Morningstar rating. Over this period the fund has returned 4% per year with a volatility 3 times lower than equities. We see this as another confirmation of our expertise in the asset class that had already been rewarded by 8 Refinitiv Lipper Fund Awards in the last 12 years.
In our view these results validate our unconventional investment approach based on the following principles:
The fund gives access to the global convertible bond market with a concentrated portfolio (about 70 positions), limited exposure to equity markets (maximum 40%) and the possibility to raise a significant cash bucket in uncertain times.
We think the liberty our fund managers have to totally deviate from the benchmark is key today, as the global convertible universe is heavily skewed towards high delta technology names, TESLA being the most famous example of a too significant weight in the convertible market benchmark.
After a rather subdued 2018 and 2019 convertibles have performed well in 2020 so far limiting the COVID drawdown of the beginning of the year to about 10% and having caught a substantial part of the equity rally since May after that. As a result, at the end of September, our fund is up by almost 3.5% on the year to date significantly outperforming equities with much less volatility.
It is equally noteworthy that the primary market for convertible bonds has been very active since the beginning of the year, in the US but equally in Europe, a market that is approaching the same capitalisation as it had in its early 2000 glory days.
The fund is registered in Luxemburg, Switzerland, Italy, Germany, The Netherlands and France. Share classes are available in EURO, CHF, USD and GBP with a daily valuation and liquidity. All currency risks are hedged.
ID Card of the fund :
Portfolio composition : 100% pure convertibles of all types, from IG over HY to NR and from bond like to equity like. We do not use synthetics, options or futures.
Geographical exposure : Global (hard currency)
Equity exposure : Moderate / 20 – 40%
Average Rating : BBB-
Investment style : Bottum up bond picking – Sector driven
Number of holdings : 60 – 70
We would like to sincerely thank our investors for the trust they have given us over the last five years and we think that convertibles should continue to benefit from the current volatile environment, heavy issuance and interesting valuations – good years probably lie ahead of us.