After a stellar 2020 when convertible bonds returned 46.2%1(as measured by the ICE BofA All US convertible Index – VXA0) and outperformed the S&P 500 by more than 25%, the asset class had a more modest 2021. In 2021, the VXA0 returned 6.34%, which outperformed most fixed income indices but underperformed most equity indices as shown in the PDF below:
Bonds Are Not Protecting You From Inflation
This paper delves into how bonds may not be as effective as expected in safeguarding