The market for non-U.S. convertibles remains relatively inefficient given the complex nature of convertible securities and the fact that institutional and retail investors often overlook the asset class as a result.
Over the long term, non-U.S. convertibles have delivered the majority of the performance of non-U.S. equities with greatly reduced risk. "Non-U.S. convertibles have been attractive in terms of fixed income characteristics, equity participation and quality of issuer," says Abe Ofer, who leads Oaktree's non-U.S. Convertibles team along with Jean-Pierre Latrille and Petar Raketic.
Our research process identifies statistically underpriced convertibles, which are further scrutinized for low-to-moderate conversion premiums, meaningful yield, call protection and creditworthiness.
"We place a heavy emphasis on issues with substantial downside protection and diversify by region, sector and industry," says Mr. Latrille. Co-portfolio manager Mr. Raketic adds, “We seek to accomplish our mandate through the dedicated application of fundamental credit analysis and adherence to a risk-controlled investment philosophy."
Learn more about Oaktree's UCITS Funds.