Neuflize OBC Investissements launches convertible bond fund
The new fund’s performance objective is to provide a yield superior to the BTAN 2.25% February 25 2016, which has so far yielded 1.7%.
NOBC Convertibles 2016 went live at the end of January 2012.
It is structured as an OPCVM (Ucits) and is regulated by the French Autorité des Marchés Financiers (AMF).
The first step in the fund’s investment process is to take a macro-economic top down view to determine the portfolio’s sector allocations and risk profile.
The second step is bottom-up to select the convertible bonds that will make up the portfolio and potentially benefit from rising equity markets.
The fund can also invest in debt. Its allocation to debt instruments will increase if the yields provided by the convertible bonds decrease.
The fund is still in its promotion phase which was initially intended to end in March 2012 but has now been extended to April 2012.
Convertible bonds started 2012 with strong performance, with the Lyxor Convertible Bonds & Volatility Arbitrage Index returning 2.17% in January.
The strategy suffered negative performance in 2011 when it was down 1.71%, although it performed significantly better than other hedge fund strategies: the Lyxor hedge fund index was down 6.59% last year.