€uro best-buy, the supplement of €uro Magazin, spoke to Roland Haller, Managing Director of Luxembourg-based Nobis Asset Management, about the global bond fund LILUX CONVERT with a focus on convertible bonds.
€uro best-buy 05/2022: “Not either or… both.
Bond funds, convertibles worldwide.
Investors in Singapore Airlines can opt for investments in shares or bonds. Alternatively, investors can buy the airline's convertible bonds, which are a mixture of both. If the airline share prices rise, its convertible bonds rise also by an average of two-thirds. However, should the airline share price declines, the airline convertible changes more and more into a bond and eventually stops declining.
Experts call this lower limit the ‘bond floor’, something which Hanns Grad from Nobis Asset Management in Luxembourg also always keeps an eye on. Grad manages the global convertible fund LILUX CONVERT and likes to buy convertible bonds with a purchase price that is not too far from the bond floor. "This offers a certain degree of protection," says Roland Haller, who acts as managing director at Nobis Asset Management. In practical terms, this means: Grad likes to buy a convertible bond at 100 per cent when the bond floor is at 90 per cent. Generally, Grad diversifies the portfolio across many sectors from different countries and leaves the currency risk open or hedges it, if necessary. In addition, as it is currently the case, he also mixes normal corporate and currency bonds into the portfolio if there are too few attractive convertible bonds.
€uro-Fazit: An investment in shares with a safety net.”
Learn more about how the fund manager Hanns Grad invests and diversifies.