Top Picks of the Month – December 2020
We show here a selection of funds that might be of interest to you. They were chosen either for their outstanding performance, which is likely to continue, or for their potential for attractive returns or diversification given current and expected market conditions.
Fixed Income Global Convertible Bonds
The YTD performance of the convertible bond market has been spectacular so far this year (+18.1% as of 30.11.2020), comfortably beating the global equity markets. This was due to the nature of the convertible bonds which took profit from the increase of the volatility but also from the sector distribution of convertible issuers which saw a significant growth of the US technology companies for the last two years. The Ellipsis fund tend to avoid bias, both in terms of sector allocation and curve positioning. The strategy is global, balanced and focused on investment opportunities which are located where the CBs curve is the most convex (target delta of 40% – 50%). The current delta is 44% and the spread to the bond floor is 21%.
US Equities
The fund is a core strategy for an US equity allocation. The Good Governance fund’s universe is comprised exclusively of companies within the S&P 500 universe. It is their belief that the quality of the Board, the management of a company are key to deploy good governance practices. In this context the way the company communicates to the outside is a good way of capturing the quality of the governance. The fund is beating the S&P 500 by more than 15% thanks to its sector allocation but more importantly thanks to its stock picking within the different sectors.