Allocators and consultants continue to seek out alternative options to a core fixed income allocation as concerns grow over rising rates and the possibility of heightened volatility. As rates have continued to rise, investors are turning to less liquid or non-core options and one of the asset classes that is commonly utilized is the high yield market. This has led to yields of high yield bonds steeply declining to all-time lows of sub 4% and when you combine that with rising interest rates and impending inflation fears, the outlook for the asset class is in question. We believe that this is an opportune time to seek alternatives and one of the optimal allocations given the current environment includes actively managed convertible strategies.
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2024: Convertible Bonds Outlook
Convertible bonds, represented by the ICE BofA All US Convertibles Index, rebounded +12.99% in 2023,
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1 The yearly awards, presented by Envestnet | PMC and Investment Advisor recognize active managers who have beaten their benchmarks, shown solid performance in general over time and are the best in their respective asset class. Eligibility requires the portfolio manager have $200 million in assets and three years of experience. Additionally, the managers also need to be open to new investment on the Envestnet platform. Award finalists were chosen using Envestnet | PMC’s proprietary, systematic, and multi-factor methodology for evaluating managers, which takes a variety of qualitative and quantitative criteria into consideration, such as investment process and style, performance, firm profile, customer service, and tax efficiency. SSI Investment Management did not pay to participate.
Past performance is not necessarily indicative of future results.
