Joe Wysocki, CFA, Senior Vice President, Co-Portfolio Manager, points out that convertibles have historically produced positive total returns during rising rate environments that traditional fixed income has struggled with.

Joe Wysocki, CFA, Senior Vice President, Co-Portfolio Manager, observes that technology companies are typically growth companies, often with healthy valuations. An investor in a tech company’s convertible expects to participate in the upside when anticipated growth materializes, while seeking to avoid much of the downside if it does not.

A convertible issuer’s below-investment grade rating—or no rating at all—is not the negative signal that an uninformed investor might expect, explains Joe Wysocki, CFA, Senior Vice President, Co-Portfolio Manager.

Joe Wysocki, CFA, Senior Vice President, Co-Portfolio Manager, looks at why convertibles often make sense for smaller, mid-cap companies with an established growth niche and for larger growth companies seeking capital for future growth.

Joe Wysocki, CFA, Senior Vice President, Co-Portfolio Manager, provides an overview of the convertibles market, noting “opportunities to give us the asymmetric risk/reward profile that we think is the sweet spot of convertible investing.”

Where does it fit in a client’s portfolio? According to Joe Cusick, Vice President, Portfolio Specialist, CIHEX aims for less volatility, shallow drawdowns and quicker rebounds after equity market pullbacks.

Traditional portfolios don’t always provide adequate diversification, particularly during market shocks, says Joe Cusick, Vice President, Portfolio Specialist. Options-based funds offer an alternative.

Joe Cusick, Vice President, Portfolio Specialist, favors CIHEX’s dynamic approach, pointing out that fund managers with a set it/forget it methodology could miss out on new opportunities as they arise.

Joe Cusick, Vice President, Portfolio Specialist, defines the “North Star trade” and its role in seeking to take advantage of the market’s natural drift to the upside while protecting against market shocks.