- Added 5 new positions during the month;
- The relative scarcity of M&A transactions spurred a tightening deal spreads on all of our portfolio positions, contributing to the month’s performance.
- Cheapening converts allowed attractive portfolio additions, but negatively impacted on a mark to market basis;
- Added 2 new deep in the-money US converts “puts” to hedge against possible market upset, with plenty of available capital for opportunistic buying.
FIXED INCOME ARBITRAGE
- Positive performance as credit spreads tightened and the dovish bias of most central banks, plus the revival of US-China trade talks, favoured riskier assets;
- Slight tactical increase in portfolio credit risk to benefit from credit spread compression, profit taking in the second half of October.