Union Investment launches global convertibles fund
Union Investment has launched the UniInstitutional Global Convertibles Sustainable, which is aimed at institutional investors seeking exposure to upside equity risk in line with ethical, social and eco-friendly criteria.
Union Investment adds that the fund provides exposure to high yield convertible bonds, additionally enhancing the earnings potential of the portfolio.
Sven Hölzer, fund manager, said: “The corporate-bond characteristics of convertibles provide investors with consistent income in the form of coupon payments, as well as a fixed minimum redemption amount. At the same time, the embedded equity call options offer unlimited participation in equity returns. This makes it possible to generate equity-like earnings with less downside risk.”
The fund will invest in international convertibles and warrant-linked bonds, fixed and floating-rate paper, money market instruments and derivatives. Non-euro-denominated positions are largely hedged against currency risk, Union Invest added.
It will only invest in paper issued by companies meeting defined sustainability criteria, such as International Labour Organization (ILO) standards, and which do not breach any human rights. Screening criteria for government bonds include undemocratic regimes or widespread corruption in an issuing country.