Top Performers in Equity and Debt Markets
In the midst of the COVID-19 pandemic, some investors have found opportunities in an often-overlooked financial instrument: convertible bonds. These unique securities, which combine elements of corporate bonds and stocks, have proven to be a valuable addition to portfolios seeking high return-risk ratios and global diversification.
One such fund that has garnered attention is the Convertible Global Diversified (ISIN: DE000A0M9995), managed by Holinger Asset Management. Since the beginning of the year, the fund has achieved an impressive over 8 percent return and currently ranks at the top of its peer group. Over the past ten years, it has grown by around 80 percent with relatively low volatility.
Alexander Müller, a seasoned investor, sees this fund as a top component for defence in a portfolio due to its experienced management and past performance. Müller and his team analyze up to five new convertible bonds issued daily, ensuring a core portfolio of around 60 high-quality convertible bonds.
Other companies affected by the pandemic, such as Booking.com and American Eagle, also issued convertible bonds during the crisis. One notable example is Carnival Cruises, whose convertible bond offered attractive yields during the turbulent times. By the end of April 2020, the Carnival stock stood at 180%, giving investors a monthly return of 80%. Within two days, the Carnival stock rose to 116% and closed the week at 138%.
When choosing a convertible bond fund, investors should consider factors such as volatility, Maximum Drawdown, and Delta (stock sensitivity). Top convertible bond funds with active management, global diversification, and strong credit selection, like Flossbach von Storch’s and Mirabaud’s global convertible bond strategies, likely fared better in volatility and drawdown mitigation during the crisis due to their fundamental credit focus and hedging strategies.
The Flossbach von Storch Global Convertible Bond - R, for instance, invests globally in convertible bonds with a portfolio concentrated mainly in Europe (58%), including well-known names like Bechtle, ENI, and Volkswagen hybrids as top holdings. It employs active management to balance risk and return, targeting diversified regions and sectors.
Mirabaud Sustainable Convertibles Global A, on the other hand, is a highly active, high-conviction fund focusing on around 50 global convertible securities with significant ESG integration. It uses fundamental analysis and Moody’s methodology for credit risk management and targets sustainable, long-term capital growth while minimizing default risk. The fund also avoids synthetic convertibles and uses currency hedging, emphasizing low volatility and global diversification.
Although specific fund-level COVID-19 performance data is scarce, market context and proxy ETFs indicate these strategies likely managed volatility and benefited from post-crisis market recoveries and central bank support. The iShares Convertible Bond ETF (ICVT), a proxy for global convertible bond performance, posted strong returns with a 13.92% one-year performance as of mid-2025, reflecting robust recovery and growth potential in convertible bonds post-COVID.
In summary, top convertible bond funds with strong return-risk profiles and global diversification include Flossbach von Storch’s and Mirabaud’s global convertible bond strategies, which combine active management with credit risk control and sustainability factors. These funds likely managed volatility and benefited from post-crisis market recoveries and central bank support, making them an attractive option for investors seeking to balance risk and return.
However, it's important to note that convertibles are a niche product that receives little attention, partially due to high entry barriers and minimum investment amounts often exceeding 100,000 euros. As with any investment, careful research and consideration should be taken before investing in convertible bond funds.
- Investors seeking to diversify their personal-finance portfolio and gain high return-risk ratios might consider other funds like Flossbach von Storch's and Mirabaud's global convertible bond strategies, which have demonstrated strong performance, particularly during times of crisis.
- While some investors might find interests in investing in convertible bonds due to potential high returns, it's crucial to comprehend the unique characteristics of these financial instruments, as they are often overlooked and have high entry barriers, requiring considerable research and consideration.
