Sun, Oct 4, 2015
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Great rotation? What great rotation?

Friday, May 17, 2013

Alex McKnight
In the article below, Alex McKnight, investment manager at GAM, an independent, active investment management firm, comments on why convertibles are catching investors’ eyes.

We believe the "great rotation" is overhyped, what we are seeing is actually a natural shift into riskier equity linked assets as markets rise and risk aversion begins to wane. This reflects fixed income investors moving into areas that are less exposed to the rise in interest rates and falling bond yields that typically occur when economies are improving and equity markets are rising. Given the strong performance of credit markets last year we are starting to see investors switch out of investment grade and high yield credit into convertible bonds, to take advantage of increasingly bullish markets.

Convertible bonds issuance has been strong this year, with deals announced in European household names including Air France and Melia Hotels. While not all recent convertibles issuance represented good value for money, we believe there is no such thing as 'bad’ new issuance. Deals can be individually poor, yet new issuance is always positive for the market as it provides greater choice and indicates that issuers are keen to release paper, thereby widening the investable universe. Lower quality issues also create attractive hedging opportunities as they can be shorted.

The UBS Global Focus Inv Grade CB Index ha......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Performance - Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September, Risky strategy sinks small hedge fund[more]

    Hedge fund moguls Einhorn, Loeb, Rosenstein lose money in September From Billionaire stock pickers David Einhorn, Daniel Loeb and Barry Rosenstein on Wednesday told their wealthy investors they lost money in September as market turmoil inflicted more pain on some of America'

  2. Opalesque Exclusive: IRAs represent billions of untapped capital for hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva: Retirement accounts might not be the first source that comes to mind for those looking to raise funds, but they may represent billions of untapped capital. Unlike traditional retirement accounts,

  3. Opalesque TV: One way to access market hedge funds in the EU under the AIFMD radar[more]

    Benedicte Gravrand, Opalesque Geneva: While the Cayman Islands, the US and Hong Kong await the pan-European marketing passport to be extended to alternative investment fund

  4. Vilas’ equity long bias hedge fund generates market-beating results[more]

    Komfie Manalo, Opalesque Asia: The Vilas Fund, an equity long bias fund managed by Chicago, Illinois-based Vilas Capital Management, posted five-year annualized returns, net of fees, of 23.47% vs. 15.87% for the S&P 500 Index, including divid

  5. Performance - Manager admits spin used to hide poor performance, Fortress macro hedge fund slumps 17.2% amid manager shakeup, In the hedge fund world, bigger is still better[more]

    Manager admits spin used to hide poor performance From … Colin McLean, managing director of SVM Asset Management, told FTAdviser that fund managers underperform all the time, so stories are often needed to mask or explain this. “People need to build a good framework