Report Code: A15350 | Pages: NA | Mar 2023 | 1443 Views | ||
Author(s) : NA | Tables: NA | Charts: NA |
|
Pandemic disrupted the entire world and affected many industries.
Get detailed COVID-19 impact analysis on the Convertible Bond Market
Request Now !A convertible bond is a fixed-income corporate debt security that pays interest and can be converted into a set number of common stock or equity shares. Converting a bond to stock is normally executed during the bond's life by the bondholder's discretion. In addition, a convertible bond's price is particularly sensitive to changes in interest rates. A convertible bond, like a regular bond, has a maturity date and pays interest to investors.
Furthermore, if an investor does not convert their bonds to equity, they will receive the face value of the bond at maturity. However, if an investor converts the bonds to the company's shares, the bond will lose its debt characteristics and will only have equity characteristics.Â
The global convertible bond market is segmented on the basis of type, end user, and region. Based on type, the market is divided into vanilla convertible bonds, mandatory convertibles, and reverse convertibles. On the basis of end user, the market is categorized into retail investors, institutional investors, and others. Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).
Top Impacting Factors
More flexibility compared to traditional grade bonds, diversified portfolios with capital appreciation, and lucrative long-term return potential with flexible exit options drive the growth of the market. However, a higher risk of losing capital is expected to hamper the growth. Contrarily, digital trade over exchange (ETF) is expected to create profitable opportunities in the coming years.Â
Higher Returns Compared to Traditional Investment-Grade Bonds
Convertible bonds have a higher yield, as it involves investing in a portfolio that includes both low-risk government securities and risky equities. In addition, diversification does not protect investors against loss and helps with a decrease of overall portfolio risk and improve the consistency of returns. Generally, convertible bonds have a low rating, however; the return on junk bonds has outperformed the benchmark return. Higher default credit risk and lower ratings are significant drawbacks of the convertible bond market. Therefore, the performance of higher yield bonds compared to traditional grade bonds is a major driver of this market.
Long Term Return Potential with Flexible Exit Option
Convertible bonds generally have shorter maturities with a flexible exit from bonds. Normal bonds are issued for duration of 10 years or less and are typically redeemable after four or five years. In addition, during the economic cycle's recovery phase, convertible bonds outperformed compared to several other fixed-income investment classes. As a result, long-term return potential with flexible exit option and has a high potential for higher long-term returns with a flexible exit option drives the convertible bond market share.
Key Benefits of the Report
COVID-19 Scenario Analysis
Questions Answered in the Convertible Bond Market Research Report    Â
Â
Convertible Bond Market Report Highlights
Aspects | Details |
---|---|
By Type |
|
By End User |
|
By Region |
|
Key Market Players | Alcentra, State Street Corporation, AEGON, Northern Trust Corporation., T.Rowe Price Investment Services, Kames Capital, The Vanguard Group, Edward Jones, Charles Schwab & Co., BlackRock |
Loading Table Of Content...
Start reading.
This Report and over 19,644+ more Reports, Available with Avenue Library. T&C*.
Enterprise
License/PDF
Library
Membership
*Taxes/Fees, if applicable will be added during checkout. All prices in USD
To ensure high-level data integrity, accurate analysis, and impeccable forecasts
For complete satisfaction
On-demand customization of scope of the report to exactly meet your needs
Targeted market view to provide pertinent information and save time of readers
Get insights on topics that are crucial for your business. Stay abreast of your interest areas.
Get Industry Data AlertsTo ensure high-level data integrity, accurate analysis, and impeccable forecasts
For complete satisfaction
On-demand customization of scope of the report to exactly meet your needs
Targeted market view to provide pertinent information and save time of readers