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Find out more about our Short Duration Convertible Bond strategy and gain valuable insight from our experienced team of investment professionals.
Palisade’s Short Duration Convertible Bond strategy seeks to generate asymmetric returns by investing in short-term domestic convertible bonds. Palisade believes these securities are an under-utilized asset class and that a portfolio composed of short term convertible bonds may offer investors liquid, low beta, low volatility-type exposures. The team seeks to invest in bonds that have a strong likelihood to repay principal at maturity or put date, and strives to build portfolios having attractive upside/downside capture ratios, attractive yields, and strong cash flows. Duration of the portfolio is generally expected to be less than two years.
Investment returns are expected to be driven by the optionality inherent in short-term, out-of-the-money convertibles while the structural benefits of a short duration portfolio priced near par value enhances capital preservation.
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