Convertible Bonds : The High Return Asset Class That Vanguard Abandoned

Convertible Bonds : The High Return Asset Class That Vanguard Abandoned

How convertible bonds work, why they gained 50% in 2020 and outperformed stocks over the past five years. Why Vanguard shut down their convertible bond mutual funds.

Topics discussed include:

  • How big is the convertible bond market
  • Why companies issue convertible bonds
  • How convertible bonds work and how to analyze them
  • Why convertible bonds have performed so well
  • What is a reasonable expected return for convertible bonds and what are the risks
  • What are ways to invest in convertible bonds


Thanks to Netsuite for sponsoring the episode. Take the Money For the Rest of Us listener survey.


Show Notes

A Plunge and a Recovery Drives a Top-Performing Year in Convertibles by Andrew Bary—Barron's

Convertible Bond Indices: An Overview by SPDR EMEA ETF Strategy Team—State Street Global Advisors

CONVERTIBLE SECURITIES: Structures, Valuation, Market Environment, and Asset Allocation by John P. Calamos, Sr with contributions from Eli Pars—Calamos Investments

Tesla, Inc. 2.00% Convertible Senior Notes due 2024 (the “Convertible Notes Offering”) Issuer Free Writing Prospectus—U.S. Securities and Exchange Commission

Risk and Return in Convertible Arbitrage: Evidence from the Convertible Bond Market by Vikas Agarwal, William Fung, Yee Cheng Loon, and Narayan Y. Naik

The Fluctuating Maturities of Convertible Bonds by Patrick Verwijmeren, and Antti Yang

Convertible Bond Arbitrage by George Long—Eureka Hedge

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