Convertibles
Equity
High Yield Bonds
Cash
S.T & N.O.A
1 - 5 YEARS
6 - 10 YEARS
11 - 20 YEARS
21 - 30 YEARS
PFD(EQUITY)

Credit Quality Distribution as of 04/30/2015

AA
A
BBB
BB
B
CCC
<CCC
Not Rated

Portfolio Details as of 04/30/2015

Total Net Assets
$802.48 M
Number of Holdings
98
Average Coupon
1.96%
Average Maturity
7.84 Years

Portfolio Positioning as of 03/31/2015

  • We maintained a balanced portfolio throughout the period, keeping our equity-sensitivity generally in-line with the benchmark. Credit spreads have tightened from their widest points and are generally supportive of equities.
  • We reduced the portfolio’s allocations to the consumer discretionary and transportation sectors where many holdings realized our price objectives. Our lowered exposure to these sectors reflects our belief that many companies have outperformed the benefit they will receive in a lower commodity price environment.
  • We maintain a positive bias in the biotechnology and specialty pharmaceuticals industries. While we remain disciplined with regard to price, valuations in these industries have continued to climb, as improving data and fundamentals have coincided with increased M&A activity.
  • We are encouraged by the approximately $16 billion of convertible issuance in the first quarter of 2015, up from $11 billion in the year ago period. The robust issuance has partly been driven by companies financing M&A transactions. Looking ahead, we expect to see higher issuance in sectors, such as energy, where companies find the lower cash cost of debt offered in the convertibles market to be more attractive in an environment where other forms of capital are too expensive.
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