Since the beginning of this year, with the increasing number and variety of newly issued funds, convertible bonds have attracted the attention of domestic investors for the first time. So, what is a convertible bond fund? The main investment object of convertible bond fund is convertible bonds, and the main investment of overseas convertible bond fund also includes convertible preferred stock, so it is also called convertible fund. As the name implies, convertible bonds are convertible corporate bonds, that is, bonds can be converted into stocks (benchmark stocks) of enterprises that issue convertible bonds within a specified period of time and at a specified conversion price. 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 embedded options. If the stock price rises, investors can choose to convert convertible bonds into stocks at a lower conversion price to obtain the difference income; If the price of convertible bonds rises, the convertible bonds can be sold directly to realize the income; If the prices of both have not risen, you can continue to hold convertible bonds until maturity and get the principal and interest. Therefore, convertible bonds can not only bring the same benefits as stocks, but also "guarantee" the minimum recoverable principal of bonds, and have the income space of "guaranteeing the bottom, but not capping the top". The convertible bond fund may be purchased when the enterprise issues convertible bonds, or it may be purchased from the secondary market after the issuance. If you buy from the primary market, you can fully enjoy the advantages of convertible bonds. Therefore, convertible bonds have the characteristics of both stocks and bonds, so that their risks are usually greater than ordinary bonds, but smaller than stocks. Accordingly, the risk of a large number of funds investing in convertible bonds is greater than that of funds investing in general bonds and lower than that of funds investing mainly in stocks. Investors should focus on the proportion of convertible bonds and stocks in the portfolio of convertible bond funds, because if the fund holds more stocks, its volatility will not be small. So, what are the main risks of convertible bond funds? One is the interest rate risk of bonds. The second is the risk of stock price fluctuation, because convertible bonds contain conversion options, so the price of bond issuing companies' stocks has a great influence on the price of convertible bonds. Although the price of convertible bonds and the stock price are not related to perfect positive correlation, they are closely related. When the stock price soared away from the conversion price, the convertible bond price 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 drops sharply, the price of convertible bonds will also drop a lot accordingly. In addition, the current 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 construct 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 15.9 billion US dollars. However, the long-term performance of convertible bond funds is good. By the beginning of April 24, the average annual rate of return of the above funds in the past five years was 7.25%, the average annual rate of return in the past three years was 7.47%, and the average rate of return in the past year was 28.86%. In the same period, the S&P 5 index rose by -1.3%, 2.23% and 32.93% respectively.