Convertible arbitrage has evolved and is attractive currently because of the return/risk dynamics that it provides during volatile equity markets, in an environment of lower interest rates, vastly improved credits due to abundant liquidity, and lofty equity valuations.

Convertible bond investors are often frustrated with limited investment choices or options regarding convertible securities especially related to sporadic or narrow convertible issuance, or that the universe of companies and sectors with outstanding convertibles is not larger or more diverse.

The trend of lower rates accelerated beginning November 8, 2018 when 10-year U.S. Treasury bond yields began a descent that saw their yield drop from 3.23% to a recent jaw-dropping all-time low of 0.40% on March 9, 2020.

Convertible bonds are sometimes considered the “Swiss Army knife” of financial products because they can provide investors with principal protection (barring default), income, and equity-like returns.

As a follower of the markets, I am often asked “What keeps you up at night”? This is another way of asking what concerns me about the current state of the capital markets. I would like to share some of my observations about the stock and bond…

Take a look at the two investments below. Which would you prefer? The simple average of returns in Investment A would be 10% (29+20-30+21=40/4=10). The simple…

Bull and bear stock markets have been around since the beginning of stock indices in 1896. Currently, we are in the longest bull market for stocks on record. What people forget is bear markets can last a long time…

At Wellesley Asset Management, we have found that investing in convertible bonds issued by companies with high-quality balance sheets, purchased near their par value, and with a properly structured maturity schedule may assist in managing…