On Monday 21 August, the Swiss website AllNews published an article reporting the views of Nicolas SCHRAMECK, Co-Head of Convertibles & Credit and member of the Executive Board at Ellipsis AM, on the attractiveness of convertibles.
"The implied volatility of convertible bonds has fallen since the start of the year, making it possible to buy equity market exposure with protection at an attractive price."
Extract:
"A mixed allocation of equities and bonds once again seems well suited to the macroeconomic environment. The sharp rise in interest rates has made bonds attractive again, attracting investors once more. Equities, as a real asset, offer protection against inflation, which remains high."
"In addition, the existing convertible bond market now seems to have the conditions in place to offer better relative performance thanks to a discounted bond component and the lower price of convertibility, also known as implied volatility."
Disclaimer: The information relating to the instruments or issuers mentioned in this article is for illustrative purposes only and does not constitute a buy or sell investment recommendation. At the time of publication of this article, the portfolios managed by Ellipsis AM may or may not be exposed to the issuers mentioned and the issuers may no longer be present in the portfolio at a later date. Future management decisions are not constrained by the statements and analyses reported and may even go in the opposite direction.