There are many types of funds, among which convertible bonds are the main investment targets. Many investors may have considered convertible bonds when choosing long-term investment targets, so is convertible bonds suitable for long-term holding?

Is convertible bond fund suitable for long-term holding?

There are many convertible bond funds. Whether it is suitable for long-term holding mainly depends on the asset allocation of a specific convertible bond fund or the personal ability of the fund manager.

From the risk point of view, convertible bonds are a capital preservation investment. Because convertible bonds have bond properties, they can repay the principal and interest at face value, and convertible bond funds are also capital preservation, so the risk of holding convertible bond funds for a long time is less than that of holding stock funds.

We should pay attention to two risks when investing in convertible bond funds, one is the interest rate risk of bonds, and the other is the fluctuation risk of stock prices. 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.