Shaky Markets Could Raise Profile of Convertible Bond Funds

This year, as many stocks head sideways or south and bonds are still stuck in a rut, investors may turn to convertible bonds as a way to solve both problems.

Convertible what? They're obscure all right. A search of the TSC archives turns up just 31 stories with the term "convertible bond," compared with more than 18,000 with the word "stock." But if current market trends continue, you'll be hearing a lot more about them.

"The stock market is pretty expensive and might not be the success story it's been in the past few years, so convertible bonds could get more play," says Bridget Hughes, a Morningstar analyst who has covered convertible funds. ...