Market value of investors’ US convertibles plummets 20%

The market value of institutional holdings of US convertible bonds has plunged nearly 20% during the past year, according to research by Greenwich Associates.

Alongside other investors, hedge funds are diversifying strategies or abandoning the convertibles market altogether, Connecticut-based Greenwich claims. A confluence of factors have impacted convertible bond values during the last 12 months, including low equity volatility and widening credit spreads. The aggregate value of US institutional holdings is now around $240 billion. Convertibles now represent only 45% of the average convertible investor’s total capital under management.

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