Eric Hage, Founder & CIO, Mohican Financial sat down with Julie Cooling, Founder & CEO, RIA Channel to discuss the Absolute Convertible Arbitrage Fund (ARBIX). With over 30 years of trading convertible bonds, Hage’s experience in this research-driven, labor intensive strategy is quite unique. As an Absolute Advisers sub-adviser, Mohican’s strategy, which in the past was restricted to hedge fund investors, is available in a mutual fund.
A convertible bond is a corporate issued debt security, typically issues an interest payment, and offers a feature to allow an investor to convert the bond into stock at or above a predetermined price. A convertible arbitrage strategy employs a simultaneous purchase of convertible securities and the short sale of the same issuer’s common stock. Convertible arbitrage strategies exploit potential mis-pricing of the credit component, income component, equity component and/or volatility component of the convertible bond. ARBIX delivers consistent, risk-adjusted income by giving investors access to the fixed income component of a convertible bond without exposure to the equity risk of the underlying stock. For more information, watch the Absolute & Mohican Financial “Convertible Arbitrage for Total Return” WEBCAST replay now.