Convertibles
All Qualities Convertibles Composite
Inception Date: 6/1/2001
Benchmark: Merrill Lynch All Qualities Convertible Bond Index
Investment Grade Convertibles Composite
Inception Date: 10/1/2000
Benchmark: Merrill Lynch Investment Grade Convertible Bond Index
Aviva Investors Convertibles Fact Sheet
Description:
Aviva Investors, in partnership with its affiliate, Inflective Asset Management, manages two separate convertibles solutions including Investment Grade Convertibles and All Qualities Convertibles. Convertible securities are hybrid securities designed to allow investors to enjoy equity-like upside potential with bond-like downside protection, and to allow investors to benefit from an increasingly volatile environment. The All Qualities Convertible solution encompasses a broader spectrum of securities, targeting bonds from all asset qualities. Both strategies seek to achieve growth through the long term active management of convertible securities whose values are not fully reflected in capital market valuations as measured by internal cash flow analysis.
Commentary
The convertible marketplace retreated in the second quarter – down 5.8% – as underlying equities fell sharply and spreads widened out. Investor appetite for risk has curbed as growth concerns in the U.S. and China have taken center stage along with ongoing European debt problems. We currently like hard assets, specifically gold. We also are overweight in healthcare and defense. We remain underweight in cyclical and financials, because slower growth and high leverage will negatively affect these sectors.
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Fact Sheet
Aviva Investors provides detailed composite information including performance and portfolio characteristics on a quarterly basis. Please follow the link to view this quarter's convertibles fact sheet.
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Investment Process
Aviva Investors seeks to customize investment solutions to the client's objectives, including spread/return objectives, rating agency guidelines and risk parameters. Those objectives are the foundation for our five-phase investment process.
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Research Framework
Aviva Investors uses the FTV framework as the cornerstone of our investment process: Fundamentals, Technicals and Valuations.
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