Playing Defense: Investing in Convertible Bonds

May 2014
Diversified investors often hold a mix of public stocks and bonds alongside alternatives such as real estate, private equity and hedge funds. Although convertible bonds are infrequently used by institutional investors, they may help improve a portfolio’s return and risk profile. Rocaton first highlighted the benefits of a convertibles allocation in 2006 (The Case for Convertibles, August 2006). The attached Rocaton Insights will revisit our research from 2006, review convertibles’ performance in recent years and outline various active management approaches.


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