Mirabaud Sustainable Convertible Bonds Europe Strategy

European Convertibles

Mirabaud Sustainable Convertible Bonds Europe Strategy

We bring a high conviction pure-play focus to European convertibles with a sustainable focus to maximise convexity.

Fully ESG Integrated

We fully integrate environment, social and governance principles into the investment process, which amplifies convexity. ESG materiality is at the core of our approach, and we look to understand what extra-financial risks and opportunities companies are facing, the potential financial impact and how they concretely respond to these risks and seize those opportunities.

High Conviction pure-play strategy

We invest solely in convertibles, with no exposure to synthetic securities and in order to express our convictions, we have a high weighting to off-benchmark positions. Through proprietary research, we apply our own rating methodology so we can confidently invest in companies that don’t have an official rating by a credit agency.

Dynamic approach

We manage positions actively because dispersion within markets always provides opportunities. We actively focus on delta so the strategy becomes more sensitive to equities or bonds depending on the market environment.

Maximising Convexity

We focus on a smaller segment of the convertible bond universe that provides the best asymmetric profiles. This allows us to capture upside in rising markets while limiting downside in falling markets. An overall balanced convertible profile is pursued in a well-diversified portfolio across regions and sectors.

European Convertibles

Key Characteristics

BALANCED PROFILE

We employ convexity to manage risk (limiting downside risk and participating in upward equity markets) with a delta target of between 30%-60%.

SMALL-CAP FOCUS

We expect smaller companies to outperform because they combine a high level of cyclical exposure, which will lead to a good rebound in profitability with the unlocking of economies, with cheaper relative valuations.

DEDICATED TEAM EXPERTISE

The team have almost 60 years of combined experience managing convertibles, having faced all phases of the credit cycle.

HIGHLY ACTIVE, HIGH CONVICTION

We build a concentrated portfolio with circa 40 holdings, using proprietary research to select companies for their high return potential. Our high-active share reflects an unconstrained approach across sectors and regions, alongside off-benchmark opportunities.

ESG OVERLAY

The team use exclusions and positive selection, alongside active in-depth analysis and engagement to assess how well a company is managing industry challenges and addressing sustainability and climate transition. The Fund is classified as Article 8 for the purpose of SFDR and has been awarded the SRI label issued by the French Ministry of Finance.

Convertible bonds