In a video interview for FundCalibre, James Mahon explains why Convertible Bonds work well for the Tenax Absolute Return Strategies Fund
Initially, he outlined how the fund had held up well during the difficult last quarter of 2018, confirming that "the fund was pretty static during that period". Tenax has an Elite Fund rating from FundCalibre and recently we have grown exposure in Convertible Bonds. James was asked to explain how these worked and why they are well suited to the fund.
As part of his response he explained that in addition to the interest rate on the fixed interest holding there is an option to convert them to an equity holding. "That risk profile is particularly interesting to the Fund because the bond is low-risk but the equity option provides upside if the equity rallies but not the downside ".
The Tenax fund has recently received the 5-year performance award in the 2019 Lipper Fund Awards in the Absolute Return GBP Low category.