This was a statement from James Mahon, co-Manager our Tenax Absolute Return Strategies Fund, in a recent panel debate hosted by Asset TV. One of four fund managers in the sector delivering the Absolute Return Masterclass, James highlighted this as one of the key differentiators for Tenax.

The differing specialisms of James and his fellow manager, Jeremy Wharton, mean they are ideally placed to assess at what level of a corporate structure they should be investing. James has a long track record in equity markets while Jeremy has spent the vast majority of his career working in fixed interest and derivatives.

In the video debate, James highlighted how this ability was recently put into practice: “In the December sell-off, our natural instinct would have been to focus on equity opportunities but we actually bought more credit and some convertibles.”

The topic of Convertible Bonds came up in response to the question, “Where do the managers see opportunity?”, James explained why they are an area he favours:

“Convertibles are very interesting; their profile is ideal for us, providing we buy them as a corporate bond at a sensible price for a bond so we are not taking pure equity risk. It gives us an attractive bond investment with an equity kicker if things go right for the company”.

A strength of Church House as a fund management business is in its historic and existing role as a Private Client Manager. As we design and manage a range of discretionary portfolios, we are well placed to produce effective ‘building blocks’. The Tenax Absolute Return Strategies Fund is a great example and James was clear how it benefits clients.

“There is a place for Absolute Return funds in portfolios if they achieve their objectives and are run properly. They can be a steadying influence. Their role is to achieve consistent low volatility returns.”

The discussion included analysis of what the future holds for Absolute Return funds and on this question, James provided a considered response.

“Patience is the watchword. It is important to be prepared to be in a position to take action. Opportunities will come as we saw in Dec 2018 and in the days following the Brexit referendum”.

Important information

Please note the above is for information purposes only and does not constitute advice or a personal recommendation.