The main investment object of convertible bond fund is convertible bond, and the main investment of overseas convertible bond fund also includes convertible preferred stock, so it is also called convertible bond fund. Investors who hold convertible bonds can convert bonds into stocks during the conversion period, or sell convertible bonds directly in the market for realization, or choose to hold bonds at maturity and collect principal and interest. The basic elements of convertible bonds include benchmark stock, bond interest rate, bond term, conversion term, conversion price, redemption and resale terms, etc. Convertible bonds are a mixture of ordinary bonds and options that can be converted into stocks. The difference between the convertible bond price and the benchmark stock price constitutes the value of the implied option. One is the interest rate risk of bonds. Second, the risk of stock price fluctuation, because convertible bonds contain conversion options, so the price of the issuing company's stock has a great influence on the price of convertible bonds. Although the price of convertible bonds and stock prices are not perfect positive correlation, they are closely related.

When the stock price soared away from the conversion price, the price of convertible bonds rose. When the price of convertible bonds is much higher than the intrinsic value of bonds, there is a great downside risk. If the stock price falls sharply, the price of convertible bonds will also fall a lot accordingly. In addition, at present, the domestic convertible bond market is not mature, the variety is not rich enough, and the liquidity is insufficient, which will bring certain difficulties to the convertible bond fund to build its investment portfolio and realize its future assets in time. In the United States, convertible bond funds account for a small proportion. At present, the net assets of 26 major convertible bond funds are about 654.38+059 billion US dollars. However, convertible bond funds have performed well for a long time. By the beginning of April 2004, the average annual rate of return of the above-mentioned funds in the past five years was 7.25%, the average annual rate of return in the last three years was 7.47%, and the average rate of return in the last year was 28.86%. During the same period, the S&P 500 index rose by-1.3%, 2.23% and 32.93% respectively.