Best New Fund Bond
Lazard Asset Management
Best New Fund – Bond
Shen Tan
managing director – Asia
“Lazard brings institutional-quality solutions to all investors. With the private wealth segment, we offer Lazard’s best in class strategies, with proven track records and rigorous risk management processes.
Lazard believes that investing in convertible bonds is an alternative approach to capture equity upside when equity markets recover, combined with strong downside protection when markets experience high levels of volatility. With over two decades of convertible bond investment experience, we are confident in our ability to achieve considerable alpha over the market index.
Lazard takes this opportunity to thank our clients for their continued support of our investment capabilities.”
Winnersrationale
The launch by Lazard Asset Management of the Lazard Global Convertibles Recovery Fund could hardly have been better timed. As the world gradually moves on from the COVID-19 pandemic, the strategy has effectively capitalised on opportunities arising in sectors poised to ride that recovery — ranging from cruise lines to consumer discretionary names.
The fund manager convincingly outlined to the judging panel other reasons why this was a compelling moment for convertible bonds — corporate debt securities that can be converted to equity at the discretion of the holder. These reasons included what Lazard characterises as significant mispricing in the convertible bond market, with valuations in 2022 being at near record-low levels. What is more, 30% of convertible bonds trading globally had a yield to maturity of at least 5% during the period under consideration.
Lazard has been able to capture such opportunities partly through the relatively concentrated portfolio of the Lazard Global Convertibles Recovery Fund, allowing its portfolio managers to move quickly. The actively-managed, long-only portfolio contains between 70-90 securities, versus the benchmark’s approximately 200. The actively-managed portion of the fund stands at around 80%, partly as a result of the fundamental and quantitative bottom-up analysis that forms the bedrock of its approach to security selection.
Such a carefully-considered approach is evident in the portfolio’s returns. While 2022 has been a brutal year for most major asset classes, the Lazard Global Convertibles Recovery Fund did a decent job in protecting investors’ capital. From January to August 2022, the fund returned a negative 12.9% net of fees versus -17.2% by the Barclays Global Aggregate Index during the same period.
In terms of distribution, Lazard has a dedicated intermediary private bank sales team across Hong Kong and Singapore, supported by a team of product specialists in the latter.
That is why Lazard Asset Management wins Best New Fund – Bond in Asian Private Banker’s 2023 Asset Management Awards for Excellence.
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