Diversification strategies

    Convertible bonds
    Convertible bonds combine the defensive qualities of bonds with the upside potential of equities, giving them an asymmetrical return profile. The asset class has a long track record of delivering equity-like returns with much lower volatility than stocks and improving the risk-return profile of a diversified portfolio. Our vastly-experienced Paris-based convertibles team has been working together for the past ten years, over which time it has been able to limit its funds’ exposure to equity market declines to 50% while capturing an average of around 100% of stock market rises.

    Commodities and precious metals
    Commodity prices look set for a long-term secular uptrend: rapid economic expansion and urbanisation in the developing world will fuel demand for raw materials such as base metals, while a growing global population and increasing demand for grain-intensive dairy products in China and elsewhere are likely to push up the prices of soft commodities over the years to come. Meanwhile, despite increases in mining capital expenditure and exploration, world gold production, discovery rates and ore grades are declining, at the same time as investment demand for the metal increases.

    Our commodities investment team aims to find deep-value opportunities across all the commodity classes by systematically screening the investment universe for assets trading above or below their “fair” value.

    We believe that an actively-managed exposure to commodities used in conjunction with a well-diversified range of overlay strategies is the most effective method of investing in the asset class. We seek to deliver strong risk-adjusted returns, minimise volatility and provide daily liquidity within a strict risk-management framework. Using a diverse array of strategies (e.g. relative value vs. directional; correlation and volatility arbitrage) based on a range of underlying raw materials and instruments, our skilled portfolio managers can exploit the whole range of opportunities that the commodities universe provides.

    Read our Commodities Monthly - Contact our Commodities team