In the current environment of rising interest rates, higher credit spreads and lower equity valuations, could 2023 be a year of recovery for convertible bonds?
While 2022 was a difficult year for convertible bonds, given rising correlations between bonds and equities, we find several attractive opportunities today:
- The exceptional risk adjusted historical behavior of convertible bonds showing a faster recovery than all other risky assets especially after difficult market phases.
- Convertible bonds are a risk-adjusted way to play the recovery of “growth” equities which were hurt by the rising interest rates environment
- Increasing yield and carry of the securities leading the large part of the universe trading below par
- M&A opportunities in tech and biotech together with a re-opening of the primary markets could both represent further performance drivers.
Groupama Asset Management has 20 years of experience in managing convertible bonds with a dedicated team offering a broad spectrum of solutions in terms of risk/reward, geographical diversification and ESG integration.
Presentation by Groupama Asset Management
Jean Fauconnier, Head of Convertible Bonds Expertise, Groupama AM
Julia Kung, CFA, Convertible Bond Portfolio Manager, Groupama AM
Head of Convertible Bonds Expertise, Groupama AM
Jean Fauconnier, Head of Convertible Bonds Expertise, joined Groupama AM in 1997 and has 34 years of experience in the asset management industry.
Jean began his career in 1989 at the SOREMA, subsidiary of the group Groupama, as bond Portfolio Manager. In 1997, he entered Groupama AM as a Fixed Income Portfolio Manager. He was Head of Fixed Income UCITS investment team from 2000 to 2006. From 2006 to 2009, he was Head of International Fixed Income Management. From 2009 Jean is head of Convertible Bond expertise within our company.
Jean graduated with a Master’s degree in Econometrics.
CFA, Convertible Bond Portfolio Manager, Groupama AM
Julia Kung, Convertible Bond Portfolio Manager, joined Groupama Asset Management in 2022 and has 25 years of experience in finance/asset management.
Julia began her career in 1998 at Goldman Sachs as a financial analyst in the Investment Banking Division in New York. In 2007, she joined Amundi Asset Management as an investment specialist for fund-of-hedge funds and volatility & convertible bonds. In 2016 she became a buy side analyst at Amundi covering consumer and in 2018 she became portfolio manager of convertible bonds
Julia graduated with a Bachelor of Science in Economics from the Wharton School at the University of Pennsylvania and received her MBA from INSEAD. Julia is a Chartered Financial Analyst (CFA).
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