For the first time in a while, investors are anticipating an environment of rising interest rates. Talk to your advisor to make sure your portfolio is positioned appropriately, and learn more about Invesco Convertible Securities Fund.
1 Source: Bank of America Merrill Lynch Lighthouse Analytics. Convertibles represented by the BofA Merrill Lynch All US Convertibles Index and domestic high yield represented by the BofA Merrill Lynch High Yield Broad Market Index.
2 Source: Bank of America Merrill Lynch Lighthouse Analytics. Duration of convertible market as per the BofA Merrill Lynch All US Convertibles Index is approximately 2.0 years, high yield market as per the BofA Merrill Lynch High Yield Broad Market Index is approximately 4.1 years, corporate high grade as per the BofA Merrill Lynch High Grade Broad Market Index is approximately 6.7 years.
The value of convertible securities may be affected by market interest rates, the risk that the issuer will default, the value of the underlying stock or the right of the issuer to buy back the convertible securities.
A basis point is one hundredth of a percentage point.
Duration, which measures the price sensitivity of a fixed income investment to interest rate changes, is the number of years it will take a bond’s cash flow to repay an investor the bond’s purchase price.
The Barclays U.S. Government Credit Index includes Treasuries and agencies that represent the government portion of the index, and it includes publicly issued US corporate and foreign debentures and secured notes that meet specified maturity, liquidity and quality requirements to represent the credit interests.
The BofA Merrill Lynch All U.S. Convertibles Index is an unmanaged index that measures performance of US dollar-denominated convertible securities not currently in bankruptcy with a total market value greater than $50 million at issuance.
The Barclays US Corporate High Yield Index is an unmanaged index considered representative of fixed-rate, noninvestment-grade debt.
The S&P 500® Index is an unmanaged index considered representative of the US stock market.