English

    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: Credit risk, Operational risk and risks related to asset safekeeping and Risks linked to the use of derivatives and financial techniques.

    glossary.

    Global Convertible Bonds

    Combining upside participation with downside protection 

     

    A convertible bond offers exposure to equities with the defensive qualities of fixed income. Our strategy is designed to exploit high-conviction global opportunities and mitigate drawdowns. We believe this approach generates the best risk-adjusted returns. 

    50%

    the portion of global equity gains captured by convertibles historically, with a third of the volatility1

    ~ USD

    365bn

    in new convertible bond issuance since 20232

    20 years

    of lower default rates for convertibles than for high-yield bonds3

    overview
    overview·philosophy·universe·process·key figures·investment team ·insights

    overview.

    A highly experienced global team dedicated to the asset class, with a steadfast focus on downside protection/capital preservation.

    why invest?

    Best of both worlds
    Convertibles are corporate bonds that allow investors to share in the potential upside of the underlying equity. The combination can appeal to a broad range of investors, with the inherent asymmetry providing useful diversification

    Asymmetrical quality
    Convexity means that investors benefit from potential equity gains while mitigating losses during downturns due to the protection offered by the bond component; convertibles are less sensitive to moves in interest rates than most traditional bonds. 

    Diversification tool
    As part of a diversified portfolio, they may increase potential performance while reducing volatility in turbulent markets. Many convertible issuers have no other public debt, and the investable universe differs from traditional equity and fixed income indices. 

    A growing opportunity
    Companies are increasingly turning to the convertibles market for capital, with a surge in new issuance since 2023. The universe is net-expanding, and overall credit quality continues to improve.

    Our highly experienced team  
    Members have an average of 21 years of experience in convertible bonds and 12 years at LOIM4.

    philosophy.

    The strategy has a quality bias in terms of credit and the long-term sustainability of the business models of each invesment. We have remained steadfast in our focus on downside protection and capital preservation. Our approach draws on both sides of the asset class: 

     

    1. Exposure to equity market gains
    The extent to which the price of the convertible bond is expected to change for any given change in stock price is known as the delta. We aim for a portfolio delta between 30% and 60%5

    2. Downside protection from bond characteristics
    We look for a strong bond floor. This is the value of the bond element of the convertible. Our rigorous credit analysis establishes an internal rating for each issue.

    We aim to exploit the full power of both worlds, searching across the globe for the best investment opportunities. While bold in our investment decisions, we are conservative in our approach to risk. We never invest in convertible bonds with a credit rating below B-.

     

    Find out more about our Convertible Bond fund, including share classes.

     

    more information

    universe.

    Our team searches for the highest-quality investments across regions, sectors and styles, targeting an overall investment grade credit rating at all times for the portfolio. We look for themes with discernible performance drivers.
     

    Global convertible bond market6:
    Key investment themes for convertible bonds7: 
    Convertibles offer complementary exposure8: 

    Global Convertibles vs Global Equity (%)

    Global Convertibles vs Global High Yield (%)

    process.

    Built on four pillars:

    Macro and thematic analysis determines the allocation of the portfolio, based on global economic and thematic trends

    Screening of the investment universe involves filtering to narrow down the eligible instruments

    Analysis combines fundamental company research with technical evaluation of convertible instruments

    Final portfolio construction is based on inputs from the previous three stages, guided by the output of a proprietary quantitative tool. The sizing tool integrates all the relevant characteristics of the convertible bond and the analyst’s view of the company.

    key figures9.

    2002

    9 December 2002 
    Strategy inception

    3 -5years

    investment horizon

    USD

    150mn

    minimum issue size (for liquidity purposes)

    investment team10.

    locom/_legacy/images/experts/LOcom_AuthorsAM-Gernath

    Arnaud Gernath 
    Head of Convertible Bonds, London

    Lydia-Chaumont-corp-backgd-author.png

    Lydia Chaumont
    Client Portfolio Manager

    1 LOIM, FTSE, Bloomberg LLP, MSCI since 31 December 2004.  Past performance is no guarantee of future returns.
    2 LOIM, BoAML, data as of December 2025.
    3 LOIM and BoAML. As of 30 November 2025.
    4  As of 30 November 2025.
    5  Individual positions may have lower or higher sensitivity if our analysis reveals value outside of the balanced zone.
    6  BoAML, as of 30 November 2025.
    7  As of 30 November 2025. For illustrative purposes only.
    8 LOIM, Bloomberg. FTSE Global Focus, MSCI World, Bloomberg Global High Yield, all euro-hedged. As of 30 September 2025 (updated quarterly).
    9  For illustrative purposes only.
    10 Investment team subject to change without notice.

    insights.

    LOIM retains ERAFP global SRI convertible bonds mandate
    Global Convertible BondsCorporate
    Global Convertible BondsCorporate

    LOIM retains ERAFP global SRI convertible bonds mandate

    Away from the pack: how convertibles enhance portfolio diversification beyond equity and credit markets
    convertible bondsGlobal Convertible Bonds
    convertible bondsGlobal Convertible Bonds

    Away from the pack: how convertibles enhance portfolio diversification beyond equity and credit markets

    Gaining exposure to growth and innovation through convertible bonds
    convertible bondsGlobal Convertible Bonds
    convertible bondsGlobal Convertible Bondsconvertibles

    Gaining exposure to growth and innovation through convertible bonds

    With multiple sources of return, convertible bonds are well-suited for uncertainty in today’s markets
    convertible bondsGlobal Convertible Bonds
    convertible bondsGlobal Convertible Bonds

    With multiple sources of return, convertible bonds are well-suited for uncertainty in today’s markets

    Convertible bonds for the ups and downs of uncertainty
    convertible bondsGlobal Convertible Bonds
    convertible bondsGlobal Convertible Bonds

    Convertible bonds for the ups and downs of uncertainty

    An asset class for all seasons: 20 years of investing in convertible bonds
    convertible bondsGlobal Convertible Bonds
    convertible bondsGlobal Convertible Bonds

    An asset class for all seasons: 20 years of investing in convertible bonds

    Measuring climate alignment, one temperature at a time
    sustainable investmentTNZ equities
    sustainable investmentTNZ equitiesHolistiQTNZ Fixed IncomeTargetNetZero Global Convertible Bond

    Measuring climate alignment, one temperature at a time

    Convertible bonds: cutting emissions and promoting efficiency
    investment viewpointsInstitutional
    investment viewpointsInstitutionalWholesaleconvertiblesTargetNetZero Global Convertible Bond

    Convertible bonds: cutting emissions and promoting efficiency

    Targeting net zero: 5 reasons to rethink portfolio decarbonisation
    sustainable investmentInstitutional
    sustainable investmentInstitutionalTNZ Fixed IncomeSustainabilityWholesaleTNZ equitiesTargetNetZero Global Convertible Bond

    Targeting net zero: 5 reasons to rethink portfolio decarbonisation

    Webinar | rethink net zero: investing in the transition
    sustainable investmentInstitutional
    sustainable investmentInstitutionalTNZ Fixed IncomeWholesaleTNZ equitiesTargetNetZero Global Convertible Bond

    Webinar | rethink net zero: investing in the transition

    more insights

    get in touch.

    Please enter your first name.

    Please enter your last name.

    Please enter your company name.

    Please enter your job title.

    Please enter a valid professional email address.

    Your information will be used accordingly to our Privacy Statement

    Lombard Odier Fleuron

    important information.

    This document is a Corporate Communication and is intended for Professional Investors only. This document is a Corporate Communication for Professional Investors only and is not a marketing communication related to a fund, an investment product or investment services in your country. This document is not intended to provide investment, tax, accounting, professional or legal advice. This document is issued by Lombard Odier Asset Management (Europe) Limited (hereinafter the “Company”).

    More informations