1. Investment expertise
  2. Convertible bonds
Investment expertise

Convertible bonds

Convertible bonds

Convertible bonds combine the defensive qualities of straight bonds with the upside potential of equities, which gives them an asymmetric risk/return profile. This characteristic is a considerable advantage in the long term, as it enables this asset class to deliver equity-like performances with significantly lower volatility.

Investment case

  • Convertible bonds have a long track record of delivering equity-like returns with much lower volatility, improving the risk/return profile of a diversified portfolio.
  • Being partly sensitive to equity, convertible bonds have lower interest-rate sensitivity than straight bonds with identical duration.
  • Additionally, European convertible bonds currently exhibit cheap options features compared with listed options, which makes them a good alternative for investors seeking optionality.
  • The outlook for the asset class is highly favourable:
    More companies are turning to convertibles for their financing needs.
    Investors are increasingly seeing them as a valid alternative to both equities and bonds.

A long-term commitment to the asset class

  • UBP has managed convertible bonds since 1999 with top-quartile performances
  • UBP has EUR 3.8 bn (as of 30.09.2016) under management in convertible bonds

Investment team

  • The UBP Convertible Bond team is composed of 12 investment professionals, all dedicated to the asset class.
  • Jean-Edouard Reymond, head of the Convertible Bond team, has appointed four region-specific portfolio managers who act as his back-up in the daily management of the funds.
  • Beyond their geographical specialisations, they also act as contributors throughout the range on credit, volatility and option-related matters.
  • The team can rely on a senior convertibles and credit adviser, a senior quantitative analyst, a junior trader, a front developer and two investment specialists.
  • The team also has access to a strong network of resources within UBP, including:
    • A global asset-allocation team (Geneva);
    • A credit research team (Geneva/Zurich);
    • European equity and emerging equity analysts (London).

Investment process

A five-step, bottom-up process to filter the European convertible bond universe from 250 securities to around 65.

  1. Investment Universe
    Minimum size and liquidity filters – ± 200 securities
  2. Convertible Bond Analysis
    Assessment of credit spread, implied volatility and convexity – ± 110 securities
  3. Equity & Credit Analysis
    Analysis of the underlying equity's upside potential and of the issuer's credit – ± 65 securities
  4. Portfolio Construction
    Weights driven by credit quality – convertible bond portfolio
  5. Exposure Management
    Discretionary management of equity, interest rate and sensitivity when appropriate – final portfolio

Fund concept

Our funds are designed to capitalise on the most attractive features of convertibles, using an objective, bottom-up process with no equity or bond bias.


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Institutional clients

With a team of more than 200 people, UBP Asset Management has built an on-the-ground presence in the world’s major markets through organic growth and selected partnerships.

Our fund range


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