Mirabaud - Convertibles Global AH cap. EUR

Performance update

Equities roared back in May, with all large equity indices (except for the Nikkei) in positive territory for the year. The US and China agreed to de-escalate, with the US agreeing to a 90-day cut of tariffs on Chinese goods from 145% to 30%, while China reduced tariffs on US goods from 125% to 10%. However, numerous hurdles remain, including with allies. The rates market continued to cause angst among investors as budget and deficit concerns re-ignited.

Convertible bonds' underlying equities slightly underperformed broad global equity indices (+5.51% vs +5.98%), while convertibles lagged their delta-implied moves, capturing 46% of the positive performance of their underlying equities. From a regional perspective, on an absolute basis, North America contributed the most to fund performance, followed by APAC and EMEA. Japan brought up the rear. From a sector standpoint, IT and consumer discretionary were the main contributors on an absolute basis, while only consumer staples detracted. At the security level, the leading relative positive contributors were Coinbase 0.25% 01/04/2030, SBI Holdings 0% 25/07/2031 and B2gold 2.75% 01/02/2030. The main relative detractors were Rohto Pharmaceuticals 0% 15/03/2032, Seagate 3.5% 01/06/2028 and Akamai 1.125% 15/02/2029.

Portfolio activity

During the month, we exited On Semiconductor 0% 01/05/2027, Seagate 3.5% 01/06/2028, American Water 3.625% 15/06/2026, IAG 1.125% 18/05/2028 and Lumentum 1.5% 15/12/2029. We initiated new positions in the primary market on Akamai 0.25% 15/05/2033, LG Energy Solution (LG Chem) 1.75% 16/06/2028 and Vonovia 0.875% 20/05/2032. We built new positions in the secondary market in Ana Airlines 0% 10/12/2031, Core Scientific 0% 15/06/2031, Dropbox 0% 01/03/2028 and Halozyme 1% 15/08/2028.

Sector-wise, IT represents our largest exposure at 29.49% (6.07% OW) followed by consumer discretionary at 14.00% (1.35% UW), financials at 13.62% (5.61% OW), industrials at 11.02% (1.94% UW), materials at 9.15% (3.04% OW), real estate at 7.38% (1.60% OW), healthcare at 5.53% (4.76% UW), communication services at 3.97% (0.44% UW), utilities at 3.01% (9.20% UW), and consumer staples at 2.70% (1.76% OW). Geographically, the breakdown is North America at 61.10% (2.03% UW), APAC at 18.52% (1.55% OW), Japan at 11.17% (5.20% OW) and EMEA at 9.06% (4.87% UW).