- People who see CICVX's 48.77% 2020 return and ask, "Did we miss it?" aren't considering what's unique about investing in convertibles, according to the portfolio managers.
- While a 100-basis point rate rise can be a headwind for traditional fixed income, converts often have a different response because of the embedded optionality within convertibles.
- As optimistic as the team is about the economy in 2021, they see the potential for uncertainty and volatility in the transition to re-open the economy, a changed fiscal policy, how or whether the Fed begins to unwind the massive liquidity in the system.
For further details see:
Convertible Issuance, Performance, Rising Rates And The Risk Of The Passive Approach: CICVX PMs On 2021