risks.

The following risks may be materially relevant but may not always be adequately captured by the summary risk indicator and may cause additional loss: Operational risk and risks related to asset safekeeping, Model risk and Financial, economic, regulatory and political risks.

TargetNetZero
Global Convertible Bond 

Conviction,  convexity and climate transition

 

An innovative convertible bond strategy with a defined target of aligning to net zero by 2050. We offer the potential to participate in rising equity markets and the cushion of a ‘bond floor’ in falling markets.

achieving net zero.

Policy, market and technological forces are driving the transition to a CLIC® economy that is Circular, Lean, Inclusive and Clean. Achieving net zero is fundamental to this shift, and economy-wide decarbonisation has clear risk and return implications for portfolio returns. 

To capture opportunies among companies aligning to net zero, we believe investors need to look forward. This means investing in the transition. 

A transition approach ticks all the boxes

 

why convertible bonds?

The defensive characteristics of convertibles, combined with a quality-focused approach to selection, have the potential to help investors weather a more volatile investment environment and generate appealing risk-adjusted performance.

Optionality.svg optionality.  Convertible bonds are corporate bonds which offer investors the option to convert into shares.
Asymmetry.svg asymmetry. They offer investors the opportunity to participate in the performance of equity markets while limiting the downside due to the bond characteristics of the asset class. This asymmetrical quality can provide diversification for traditional portfolios.

 

Why does this matters today?

  • Convertible bonds combine the attributes of bonds and equities
    • Less 'timing risk’ if the market cycle turns – we are paid to wait
  • Participation in the upside of the underlying equity from the option

    • Attractive for a fixed income investor – it provides more than yield alone

  • Downside protection from the bond features of coupon and principal

    • Maintains equity exposure with lower volatility

  • Provide upside / downside asymmetry – often called convexity – and can therefore offer investors the potential for attractive risk-adjusted returns 

    • Higher yields and credit spreads today support equity-like returns  

  • Diversification for traditional fixed income and equity investors

    • Low correlation to equities and bonds
  • An all-weather vehicle for every phase of the market cycle

→  At any point in the cycle, the different performance drivers – income, credit, equity, volatility – can generate returns

why convertibles for net-zero investing?

Opportunity.svg

The convertible bond universe offers myriad opportunities to achieve net-zero alignment through a diversified exposure to value companies and high-growth disruptors. The universe contains an appealing combination of growth, traditional value and new technology issuers that are active in sectors instrumental to a carbon-free future.

Supply.svg

Shifting supply patterns are creating compelling opportunities. A rising proportion of new issuance is now in the form of green bonds, providing an important way for borrowers to align proceeds towards decarbonisation.  



Source: LOIM. For illustrative purposes only. 

why us?

LOIM has invested in convertible bonds for more than 30 years. 

our strategy.

key differentiators.

investment team.

LOcom_AuthorsAM-Bucci.png
Natalia Bucci, CFA
Portfolio Manager
Co-Head of Convertible bonds

LOcom_AuthorsAM-Gernath.png
Arnaud Gernath
Portfolio Manager
Co-head of Convertible Bonds

 

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insights.

CIO views: finding value through patient investing
investment viewpoints Asset Management
investment viewpoints Asset Management Fixed Income Investment strategies DC DB Banks Wholesale Official institutions Third party asset managers Geronne Independants Institutional Consultants Insurance Fund of funds Endowments Equities Macro Multi-asset Alternatives. Convertibles

CIO views: finding value through patient investing

Our CIOs consider how patient investors could find better value. Across asset classes, which areas offer superior prospects to those with a long-term approach?

Convertible bonds: cutting emissions and promoting efficiency
investment viewpoints Institutional
investment viewpoints Institutional Wholesale Convertibles TargetNetZero Global Convertible Bond

Convertible bonds: cutting emissions and promoting efficiency

Our convertible-bond strategy focuses on companies seeking emission reductions or solution-providers that enable transition efforts.

Can high emitters be net-zero leaders?
investment viewpoints Institutional
investment viewpoints Institutional Wholesale Convertibles TargetNetZero Global Convertible Bond

Can high emitters be net-zero leaders?

Should equity investors focus only on today’s low-carbon businesses, or include transitioning companies making real emissions reductions in hard-to-abate sectors, too? 

Targeting net zero: 5 reasons to rethink portfolio decarbonisation
investment viewpoints Institutional
investment viewpoints Institutional Sustainability Wholesale TargetNetZero Global Convertible Bond TNZ equities TNZ Fixed Income

Targeting net zero: 5 reasons to rethink portfolio decarbonisation

Policy, the pitfalls of short-term, high-carbon exclusions and the need to look towards 2050 are among the five reasons why we believe many investors should rethink net-zero alignment. 

Webinar | rethink net zero: investing in the transition
investment viewpoints Institutional
investment viewpoints Institutional Wholesale TNZ equities TNZ Fixed Income TargetNetZero Global Convertible Bond

Webinar | rethink net zero: investing in the transition

Webinar | rethink net zero: decarbonise, diversify and help drive the transition

What’s the outlook for convertible bonds in 2024?
investment viewpoints Institutional
investment viewpoints Institutional Convertibles TargetNetZero Global Convertible Bond

What’s the outlook for convertible bonds in 2024?

What factors look supportive for convertible bonds in 2024? Our investment team outlines its base-case scenario and areas of potential benefit for investors.  

important information.

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