David Stonehouse, MBA, CFA, is Senior Vice President and Head of North American and Specialty Investments at AGF Investments Inc. Mr. Stonehouse has over 20 years of experience managing both fixed income and balanced portfolios. His rigorous and disciplined investment process is a combination of a top-down approach to duration and asset allocation with a bottom-up approach to security selection.
Mr. Stonehouse is a member of the AGF Fixed Income Team, which has expertise in all the major fixed income categories, including high yield, investment-grade, sovereign bonds and global convertibles, in both emerging and developed markets, as well as global currencies.
Mr. Stonehouse was previously Director, Fixed Income and Portfolio Manager with Acuity Investment Management Inc. AGF Management Ltd. acquired Acuity Funds Ltd. and Acuity Investment Management Inc. in February 2011.
In his exclusive 3,256 word interview with the Wall Street Transcript, Mr. Stonehouse reveals his top convertible bond picks for defensive minded portfolios in this specialty asset class:
“There are close to 1,000 issuers and close to 2,000 issues based on screens of minimum $50 million issue sizes. So there’s a reasonable number of convertibles to choose from.
But it’s just been a vehicle that hasn’t been employed as heavily by companies looking to raise capital and perhaps hasn’t been embraced as much by investors. There are some real advantages to converts for both issuers and investors.”
Mr. Stonehouse reveals his top convertible bond picks for defensive minded portfolios and those to avoid:
“Recent additions to the convertible portfolio include Danaher (NYSE:DHR) and Avantor (NYSE:AVTR), which just IPO-ed last week.
In terms of reductions in areas that we weren’t as fond of, on the health care side, we did reduce our exposure to some of the managed-care areas, although we still hold the likes of UnitedHealth (NYSE:UNH) and Anthem (NYSE:ANTM).
We also reduced exposure to some of the biotech areas that we had been involved in, such as Sarepta (NASDAQ:SRPT). Elsewhere, we took some money off the table on the gold side…”
Read the rest of the exclusive Wall Street Transcript 3,256 word interview to get the complete list of all the convertible bond opportunities in the market today.