Fund manager NN Investment Partners (NN IP) has launched a global convertible bond fund to meet investor demand for exposure to the asset class.
NN IP said that convertible bonds offer equity return potential with a lower downside, and low exposure to interest rates in a tightening monetary environment. NN IP senior portfolio manager, global convertible strategies, Ivan Nikolov said: “Convertible bonds are likely to remain ideally positioned to navigate through the current market environment characterised by tightening monetary policies and volatile equity markets. Our new fund allows investors access to the key benefits of the convertible asset class through a disciplined and diversified investment process.”
The fund will be managed by the NN IP’s global convertible strategies team and it has a target annual return of 1% over the benchmark of the Thomson Reuters Global Focus Hedged Convertible Bond Index. NN IP has an existing global convertible bond fund, with $1.3 billion in assets, which has returned 65.7% over the six years since its inception, compared to 40.1% for the benchmark. The new fund will combine selection of liquid securities with a credit and ESG benchmark selection.