Low-volatility, income-tilted convertibles portfolio

JPMorgan Global Convertibles Income Fund (JGCI) is the only UK-listed closed-end fund focusing on convertible bonds. While its primary aim is to provide investors with an income, the fund has recently moved to a more total return-orientated approach to meeting its objective, taking advantage of attractive risk/reward opportunities in the balanced segment of the market. Although fundamentally a bond portfolio, the equity participation offered by convertibles could prove defensive for JGCI investors if the recent fixed income sell-off becomes protracted. The NAV performance of the sterling-hedged fund has been steady while funds with unhedged overseas portfolios have seen material gains post-Brexit; JGCI’s managers note that currency volatility is a two-edged sword.