What does convertible bond fund mean?
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, expected annualized interest rate of bonds, 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.
Advantages of convertible bond funds:
First, the convertible bonds with strong bonds have certain advantages over the national bonds and corporate bonds with the same maturity;
Second, the increase of market uncertainty increases the option value of convertible bonds;
Third, the relatively low index and the increase in investment in convertible bonds by QFII and insurance companies have further locked in the downside risks of convertible bonds;
Fourth, the persistent downturn in the market and the constant revision of convertible bond prices have enhanced the aggression of the rebound or reversal of convertible bonds in the market.
Investment strategy of convertible bond fund;
1. Keep high positions, select varieties and hold centralized positions.
Due to the limited risk of convertible bonds, the expected annualized expected return is infinite in theory, which is especially suitable for holding excellent varieties in heavy positions. The first half of 2005 also proved the effectiveness of this operation idea.
2. The valuation of basic stocks is based on full circulation.
In stock investment, based on full circulation, we should increase the research on "consideration" and make use of the investment opportunities brought about by the uncertainty of A shares to create good expected annualized expected returns.
3. Increase the position ratio of convertible bonds of strong stocks, and balance the expected annualized expected return and safety by using market fluctuations.
In the period of market downturn, we should increase the positions of convertible bonds with strong stocks, improve the stocks of convertible bonds by possible conversion price adjustment, optimize the positions of convertible bonds, and balance the expected annualized expected returns and safety of convertible bonds.