Economics & Strategy – Equity-Linked Strategies: Second

Slipping to second place after five years on top is the nine-member Barclays crew co-captained this year by Maneesh Deshpande and Venu Krishna. Given low equity valuations and interest rates, convertible bond issuance is unlikely to pick up by the end of the year, Krishna says, so he and his associates are urging clients to “preserve returns and stay defensive” with portfolios that overweight convertibles that are non-investment-grade and nonrated, have bond (versus equity-like) structures and bear relatively shorter maturities. The team’s model portfolio constructed along these lines climbed 11.4 percent year-to-date through August and outpaced the 10 percent gain of the Barclays U.S. convertible composite index, he says. The Barclays team is “the best on the Street, with a deep knowledge of the asset class,” champions one buy-side supporter.