CHY - Convertibles CEF Sector Update

• The convertibles sector had a tremendous 2020 on the back of a number of tailwinds such as outperformance in its sector tilts, high volatility and falling rates.
• We take a look at the different options for investors in the sector across both open-end and closed-end funds.
• Interestingly, CEFs have not delivered consistent outperformance in this sector due to a confluence of factors such as allocation choices and deleveraging.
• Investors who want a lower-octane, pure-play convertibles alternative should have a look at mutual funds which have delivered strong absolute and risk-adjusted performance.
• The CEF sector also offers relative value potential with multiple funds managed by the same managers.

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