Posted inHead To Head, News, Research

HEAD-TO-HEAD: Aviva vs GAM

FSA compares the Aviva Investors – Global Convertibles Absolute Return Fund with the GAM Multibond Absolute Return Bond Fund.
by Fund Selector Asia
Conclusion

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The current outlook for both funds is positive, according to Douali. “The case for convertible arbitrage is strengthened by good new issuance and a limited number of arbitrage players in the market,” he said.

“The GAM fund tends to do better in periods of weaker government bond markets, which they are expecting, given the interest rate expectations.”

The Aviva convertibles fund is inherently more risky, both because it specialises in one asset class and because of the range of strategies it employs. However, the risk is well defined, Douali noted. “[An investor can] take control over the position and the risk in their own portfolio,” he said.

“While the GAM fund is more diversified in its fixed income exposures, it doesn’t mean it is immune to losses and bad decisions,” he added. “But over the long run you’d expect it to have a much lower level of volatility for that reason.”

When choosing between the two funds, Douali said that the Aviva fund better fits his personal investing style. “I like to pinpoint a market and make an allocation to it,” he said. “I would prefer to allocate to the Aviva convertible fund, because it just focuses on that.”

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