Compare Convertibles vs. Fixed Income with This Interactive Quilt
October 8, 2018
Convertible securities returns towered over fixed income asset classes in the third quarter of 2018. This has been a strong year for equities with gains concentrated in Information Technology and Health Care, two sectors well represented in the convertibles market. (For an understanding of what drives convertibles’ long- and short-term performance, see our recent blog post.)
In fact, convertibles have consistently outperformed fixed income. As shown below in our quilt, convertible bonds have been the top-performing asset class for four of the last 10 years and second to the top for two years. Shown are the calendar year total returns ranked from best to worst from 2007-2017. And, with their 10.43% return YTD, convertibles sit on top for 2018 as of 9/30/18.
We update these returns quarterly and make them available for use as a PDF (download). But this quarter we’re introducing an interactive quilt, enabling you to select asset classes to compare. Just click on the asset class at the bottom of the table. You can Show All to return to the full chart or Hide All to start over.
Select an asset class to turn on or off.
Source: Bloomberg and Morningstar. Past performance is no guarantee of future returns.
Convertible bonds are represented by the ICE BofAML All U.S. Convertibles Index (VXA0), a gauge of the performance of the U.S. convertible market.
U.S. aggregate bonds are represented by the Bloomberg Barclays U.S. Aggregate Bond Index, covers the U.S.-denominated, investment grade, fixed rate, taxable bond market of SEC-registered securities.
High yield bonds are represented by the Credit Suisse U.S. High Yield Index, an unmanaged index of high yield debt securities.
U.S. government bonds are represented by the Bloomberg Barclays U.S. Government Index, an unmanaged index considered representative of fixed income obligations issued by the U.S. Treasury, government agencies and quasi-federal corporations.
Treasury bills are represented by the Bloomberg Barclays U.S. Treasury Bill 1-3 Month Index, is a component of the Short Treasury Index and includes aged U.S. Treasury bills, notes and bonds with a remaining maturity from 1 up to (but not including) 12 months.
U.S. investment grade bonds are represented by the Bloomberg Barclays U.S. Corporate Investment Grade Index, consists of publicly issued, fixed rate, nonconvertible, investment grade debt securities.
Global asset-backed securities are represented by the Bloomberg Barclays Global Asset Backed Index, a fixed income index that focuses on asset-backed securities and includes pass-through, controlled-amortization and bullet-structured securities, which have a minimum average life of one year.
Government bonds ex. U.S. are represented by the ICE BofAML Global Government Bond Index, excluding U.S., tracks the performance of investment grade sovereign debt publicly issued and denominated in the issuer's own domestic market and currency.
The chart’s permanent home is on our All About Convertible Securities page, where you’ll find additional information about convertibles.
For information on any one of our convertible-using funds, talk to a Calamos Investment Consultant at 888-571-2567 or email [email protected].
Convertible Securities Risk: The value of a convertible security is influenced by changes in interest rates, with investment value declining as interest rates increase and increasing as interest rates decline. The credit standing of the issuer and other factors also, may have an effect on the convertible security’s investment value.
Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may not be suitable for all investors. Opinions are subject to change due to changes in the market, economic conditions or changes in the legal and/or regulatory environment and may not necessarily come to pass. This information is provided for informational purposes only and should not be considered tax, legal, or investment advice. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations.
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