The Globe and Mail
October 31, 2023.
Diana Orlic, Portfolio Manager, Wealth Advisor, Investment Advisor at Richardson Wealth, shares that amid higher interest rates, convertible bonds offer companies a cheaper way to raise capital. That’s because of their lower coupons, which can be a few hundred basis points lower than investment-grade corporate bonds.
“Convertibles’ greatest growth potential can emerge after a rout in stocks, providing risk-adjusted equity exposure with the “hedge,” if prices do not rise, of income and principal protection. The client can win either way.”
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