Convertible Bonds Outperforming Amid Market Volatility

Balanced convertible strategies have seen positive returns, outperforming major indices. Improved deal structures and rising primary issuance have contributed to this trend. The Refinitiv Global Focus Convertible Bond index has seen success, and fund managers are attracted to convertibles as a way to boost returns while managing risk. Coupon income has also improved, enhancing returns and resilience for convertible investors. Primary issuance has reached $68bn in H1, with a strong second half and future expected. Market volatility has also been favorable.

Convertible bond strategies have emerged as a favored investment vehicle for fund managers seeking to boost returns while managing risk. According to the Refinitiv Global Focus Convertible Bond index, these strategies have outperformed major indices, driven by improved deal structures and rising primary issuance. The convertible bond market has shown resilience, with coupon income enhancing returns and resilience for investors.

In the first half of 2025, primary issuance reached $68 billion, indicating a strong market for convertible bonds. This trend is expected to continue into the second half of the year, with analysts predicting a robust future for convertible strategies. Market volatility has also been favorable, providing opportunities for strategic positioning.

The success of convertible bonds can be attributed to their unique structure, which combines the characteristics of bonds and equities. Investors benefit from the potential for capital appreciation through the underlying equity, while also receiving coupon income. This dual benefit makes convertibles an attractive option for investors seeking a balanced portfolio.

The Refinitiv Global Focus Convertible Bond index has demonstrated success, with fund managers increasingly turning to convertibles as a way to enhance returns. Improved deal structures, such as better conversion terms and more favorable coupon rates, have contributed to this trend. Additionally, the rising primary issuance has provided more opportunities for investors to participate in the convertible bond market.

The convertible bond market's resilience is evident in the improved coupon income. As interest rates have remained low, the income generated by convertible bonds has become more attractive. This has further enhanced the appeal of convertibles for investors seeking stable returns.

The convertible bond market's success is not limited to the Refinitiv index. Venture Global's strategic investment in LNG projects, such as the Calcasieu Pass 2 (CP2) project, demonstrates the growing interest in alternative energy investments. This diversification can provide additional returns and risk mitigation for investors.

In conclusion, balanced convertible strategies have proven to be a viable and attractive investment option for fund managers and investors alike. With improved deal structures, rising primary issuance, and favorable market conditions, convertibles continue to offer strong potential for returns while managing risk. As the market evolves, the role of convertible bonds in investment portfolios is likely to grow.

References:
[1] https://www.hartenergy.com/exclusives/venture-global-signs-calcasieu-pass-2-lng-supply-deal-eni-213560
[2] https://www.hokanews.com/2025/07/bit-origin-bets-500m-on-dogecoin-will.html