Convertible managers innovate to profit in non-volatile markets
Convertible bond portfolio managers are finding methods of trading not reliant on implied volatility to make money
Low equity price volatility and fears of rising interest rates still hamper a convertible bond market already struggling in a crowded strategy.
James Hedges, chief executive of LJH Global Investments, says May and June proved the most difficult for convertible managers this year, with managers attributing underperformance to the said fear and, increasingly, that of cash takeovers.
"Managers also anticipate a macro reallocation of investment capital away from convertible arbitrage," Hedges says
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