1. Is the convertible bond fund losing money?
Convertible bond funds are at risk of losing money. Convertible bonds are a kind of corporate bonds, but because of the characteristics of both creditor's rights and equity, bondholders can hold the expected coupon income at maturity, and can also be converted into common stocks at a specific time and under specific conditions.
Therefore, convertible bond funds generally belong to the secondary debt base, and their correlation with the stock market is greater than that of ordinary bond funds, and their expected returns and exit fluctuations are also greater, and their risks are even higher than those of mixed debt bases.
Second, the reasons for the loss of convertible bond funds
1, price risk
Although convertible bonds have a fixed expected return on bond interest, compared with other bond varieties, the coupon rate of convertible bonds is very low. The issuance period of convertible bonds is generally 6 years, but even if it is held for the sixth year, the interest rate will be lower than 3%.
Therefore, few investors will hold due convertible bonds, and the metropolis will earn the expected income of the difference by buying low and selling high. The price of convertible bonds will be affected by the stock price. When the stock price rises, the value of convertible bonds tends to rise, and vice versa. If the fund manager buys convertible bonds at a high level, there will be book floating losses when the price of convertible bonds falls.
2. Default risk
Like other bonds, convertible bonds also have bond default risk, which depends on the solvency of listed companies. However, from the historical data, there are relatively few cases of default of convertible bonds.
The above contents about the loss of convertible bonds foundation hope to help everyone. Warm reminder, financial management is risky and investment needs to be cautious.