Alken's Dunmall: Convertibles can be the most attractive investment

Underperforming stocks key to dividends, manager argues

Robin Dunmall, manager of the $44m Alken Income Opportunities fund, is using convertible bonds in the strategy on the view they can be the "most attractive for income opportunities".

Dunmall, who has run the fund since its launch in December 2018, having joined Alken earlier in the year from J.P. Morgan Asset Management, pointed out the team is not looking to introduce either "a significant level of equity sensitivity" or "equity downside risk" to the portfolio. Why UK income investors 'should exercise caution' Instead, they are looking for situations where "the stock has underperformed, the optionality has moved out of the money and you have an instrument that is essentially trading like a bond, yielding like a bond, but nevertheless has long-term optionality, wi...