Please note that this commentary provides a very detailed analysis of the Fund’s strategy. Some of this analysis may be difficult for the average investor to fully understand. It is presented here for those who may have an interest in such a discussion and as always, we encourage investors to discuss questions with their financial adviser.
“…The US convertible new issue market continues to be healthy and supportive for convertible arbitrage. Through the third quarter, $33 billion of convertible paper has come to market which already exceeds the total for all of 2016. Most important for our niche strategy, the supply of new issues continues to be dominated by small and mid-cap companies…Going forward, if volatility continues to remain depressed and credit spreads remain at current levels, our baseline expected return – the average implied credit spread added to the risk free rate – will likely remain fairly constant. Additional profit opportunities will depend on a robust new issue market and our thorough bottom-up research leading to successful individual security selections… ” [read all]