Beating the Indexes: Investing in Convertible Bonds to Improve Performance and Reduce Risk (Richard Stout's Library) by Bill Feingold

Author:Bill Feingold
Language: eng
Format: epub
Publisher: FT Press
Published: 2012-06-15T16:00:00+00:00

More Than Two Decades of Higher Returns and Less Risk

Lest you think these numbers are too good to be true, Bank of America Merrill Lynch compiled data from the end of 1989 through the middle of 2011, comparing its comprehensive index of traditional domestic convertible bonds with the Standard & Poor’s 500 Index. BAML found that the convertibles annually returned 9.36% versus the stocks’ 8.59%.2 The convertibles did so while experiencing a standard deviation roughly two thirds as large as the stocks had.

Figure 8.2 shows the risk/return trade-off for convertibles and stocks over the period. We’ve already seen that standard deviation (volatility) is not necessarily the best measure of risk, but achieving a higher return with less variability is still a compelling story, to put it mildly.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.