Convertible/ High-Yield Strategy
Investment Goal
Investor Profile
Performance Data
Portfolio Strategy
Management Fee
Pinnacle’s Convertible/High Yield Portfolio seeks to provide high total returns from income producing securities with the potential for capital appreciation. The Strategy invests in convertible corporate bonds and convertible preferred stocks of publicly traded companies. Convertible securities typically pay higher interest or dividends than common stocks and are exchangeable into the common stock of the issuing company. If the price of the common stock rises, the convertible security will increase in value also. If the price of the common stock falls, the convertible investor receives the higher income of a bond or preferred stock.
The Convertible/High Yield Portfolio is for the investor who desires high levels of income from their portfolio with the added potential for capital appreciation. Convertible securities, as an asset class, display more risk than bonds yet less risk than stocks. The returns associated with convertible securities, when adjusted for risk (as measured by price volatility) were higher than large capitalization stocks during the past fifteen years.
* Past performance is no guarantee of future results. Please see our performance disclosure statement for more information.
** For comparison purposes, the composite is measured against BofA Merrill Lynch Convertibles Index. The index consists of convertible bonds traded in the U.S. dollar-denominated investment grade and noninvestment grade convertible securities sold into the U.S. market and publicly traded in the United States. The Index constituents are market value weighted based on the convertible securities prices and outstanding shares, and the underlying index is rebalanced daily. For an additional comparison, the composite is measured against BofA Merrill Lynch U.S. High Yield Index. The index tracks the performance of below-investment- grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market.
Updated: December 31, 2023
Inception: May 1997
Pinnacle’s Convertible/High Yield Strategy invests in a diversified portfolio of convertible securities. The portfolio manager seeks companies that are trading at a discount to book value, a low price to earnings multiple, or a low price ratio to projected cash flow. This approach lowers the risk of a diversified portfolio while retaining the potential high returns of the underlying equities.
0.75% (three-quarters of one percent) annually of the market value of assets in the portfolio. The average convertible securities mutual fund expense ratio is 1.30%.
| PORTFOLIO* | 1 YR | 5 YR | 10 YR |
|---|---|---|---|
| Gross of Fees | 10.13% | 3.24% | 2.81% |
| Net of Fees | 9.67% | 2.80% | 2.39% |
| Merrill Lynch Convertibles** | 13.77% | 12.22% | 9.43% |
| Merrill Lynch High Yield** | 13.40% | 5.22% | 4.51% |
Growth of $10,000