Convertible Strategy - Gabelli Funds Portfolio Manager James Dinsmore (3.19.2019)

http://www.gabelli.com Invest with us 1-800-GABELLI (800-422-3554) Hi, My name is James Dinsmore and I am one of the portfolio managers focused on convertible strategies at Gabelli. Our team currently manages half a billion dollars in convertible assets and has over 60 years of combined experience managing convertible portfolios. The investment case for convertible securities is a simple one. They allow you to participate in equity returns, while offering a yield advantage and maturity that help to limit downside. Over the long term, the asymmetrical return profile of convertibles has led to returns that have been in line with equity markets with three quarters of the volatility. In 2018, with equity markets falling to end the year, convertibles held up nicely, with the Barclays US Convertible Composite down about 2% or less than half of the S&P 500’s negative 4.39% return. And as the equity markets rebounded to start 2019, convertibles have kept pace, with the Barclays Index seeing 93% of the S&P 500’s returns. We are optimistic for the opportunity available to us in convertibles going forward. Strong issuance in 2018 kept the market healthy, and now there are many deals that we passed on because they were too expensive at issue that offer much more attractive risk and reward profiles. A healthy pace of issuance has continued in 2019 as the convertible market remains one of the more attractive places for companies to raise capital. We maintain a disciplined approach and we invest only in companies and issues that we feel can help us achieve our long-term goal of total returns through a mix of income and capital appreciation. There is great diversity available to us in the convertible market, even within specific sectors such as Information Technology or Health Care. We have the opportunity to invest in companies whose prospects are not directly influenced by trade wars, tariffs or the trials and tribulations of large cap technology companies. These companies are disrupting industries, creating the foundation for an increasingly data driven and digital economy, and helping legacy retailers and banks remain relevant and differentiate themselves in the age of Amazon. We believe convertibles offer a compelling way to remain invested in equity markets, increase income, and reduce downside risk. We are confident that we have built a convertible portfolio that can outperform in volatile environments while still participating if the market moves strongly higher from here.