The Pier 88 Investment Team suggest investment grade convertible securities as an interesting investment opportunity in the current market environment as they provide the potential for equity participation with downside protection. The investment grade convertible securities universe is well diversified across industry sectors, geographic regions and market caps. It also offers a current yield that is typically superior to the broader equity markets. Although there are multiple investment strategies for the convertible asset class, Pier 88 believes a fundamental “equity lens” approach provides a superior method to uncover compelling investment opportunities in the current macroeconomic environment. By focusing on the underlying equity element of this hybrid security and concentrating on “delta”, a main driver of returns, Pier 88 posits that an investment grade convertible allocation can be a compelling way for investors to achieve more performance from their traditional fixed income portfolios. Further, the asset class may be a way to provide some downside protection for those equity investors who seek to be a little more conservative following a multi-year bull market run in equities.
The companies identified do not represent all of the companies purchased, sold or recommended for portfolios advised by Pier 88 Investment Partners, LLC. The reader should not assume that investment in any company was or will be profitable. Additional information including a list of all companies is available upon request.