Morley Fund Management’s (“Morley”) International Retail Division, Privilege Portfolio International, launches a Global Convertibles Fund on 9 April 2002. The Privilege Portfolio-Global Convertibles Fund is a further sub-fund of Privilege Portfolio SICAV, its Luxembourg domiciled range of investment funds.
Morley Fund Management’s (“Morley”) International Retail Division, Privilege Portfolio International, launches a Global Convertibles Fund on 9 April 2002. The Privilege Portfolio- Global Convertibles Fund is a further sub-fund of Privilege Portfolio SICAV, its Luxembourg domiciled range of investment funds.
The Privilege Portfolio-Global Convertibles Fund will invest in a diversified portfolio of convertible bonds and preferred convertible stocks and will be denominated in US Dollars. The Fund will be approximately weighted 55% in the US, 35% in Europe and 10% in the rest of the world. It may hold up to 20% in warrants, straight bonds and equities and will be measured against the UBS Global Focus Index.
The Privilege Portfolio-Global Convertibles Fund will be managed jointly by David Clott, Portfolio Manager, who is based at Morley’s associate office in Boston* and Tom Wills, Derivatives Specialist who is based at Morley’s head office in London. Morley takes an active approach to managing convertible bonds, drawing on the research skills of its in- house independent analysis team. Top-down input into the portfolio selection is provided by the strategy team, whilst bottom up stock decisions are taken by the Fund Managers within the controls of the dedicated Morley risk management team.
Commenting on the launch, David Clott, Portfolio Manager at Morley Fund Management, said: "We believe that the convertibles market offers significant investment opportunities for both retail and institutional investors. Since 1973, convertibles in the US have offered higher risk-adjusted returns than both equities and bonds. Over the same period, convertibles have offered investors up to 70% of the upside of the underlying shares and only 54% of the downside*.” David, who will lead on US assets in the new fund, currently manages a US convertible bond portfolio that has outperformed its benchmark by over 3% per annum in the two years under his management.
Tom Wills, Derivatives Specialist at Morley Fund Management, will lead on European assets in the new fund. He said: “Record issuance in the past two years has raised the market to over $500 billion, which is a similar size to global high yield and hedge fund markets. Issuance has been particularly strong in Europe, where a deep and liquid market has developed in the face of widespread corporate restructuring. The Global Convertibles Fund will provide Privilege Portfolio investors with equity participation, coupled with downside protection.”
Robert Woolf, Managing Director, Privilege Portfolio International Ltd, added: "We believe that in the Privilege Portfolio-Global Convertibles Fund we have a unique product that is very much of its time. There are very few mutual funds in Europe offering access to this exciting asset class for both retail and institutional investors. The beauty of Convertible Bonds is that they behave like equities in rising markets, trading in line with the stock to which they are attached, but offer bond-style protection if the stock price falls.”
*source: Ibbotson Associates
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For further information:
Stephen Roberts, Head of International Retail Marketing
Tel: +352 40.28.20.319
Fax: +352 40.83.58.319
E-mail: stephenroberts@privilege.lu
GSM: +352 021.265.611
Notes to Editors:
- The value of an investment in the Privilege Portfolio funds can fall as well as rise. The investor may not get back the original amount invested.
- Privilege Portfolio is the Luxembourg domiciled investment fund of the CGNU Group with 26 sub-funds ranging from lower risk money market and bond funds through international and regional equity funds to more speculative single country and theme funds.
- Morley Fund Management Limited is the Investment Adviser to Privilege Portfolio and is a member of the Norwich Union Marketing Group, members of which are regulated in the UK by the Financial Services Authority for life assurance, pensions and investments. Morley Fund Management Limited is a CGNU Group company.
- CGNU plc is the UK's largest insurance group, one of the top-five insurers in Europe and has substantial positions in other markets around the world. CGNU is the world’s seventh- largest insurer based on gross worldwide premiums.
- CGNU's principal business activities are long-term savings, fund management and general insurance, with worldwide premium income and investment sales from ongoing business of more than Ł28 billion, and over Ł200 billion in assets under management at 31 December 2001.