Investing Ideas

Convertible securities: An evolving opportunity within MAI strategies

Active managers are finding opportunities in an asset class that is continuously refreshed as issuers grow, convert, and are replaced by new investment themes.

By: Adam Kramer Rick Gandhi Scott Mensi Brian Donnelly

Updated: 10/22/2026

Key Takeaways

What role do convertibles play within multi-asset income (MAI) strategies? Convertible securities can provide an additional source of return and diversification alongside traditional bonds, preferred securities, dividend-paying equities, and other income-oriented investments.
Why have convertible securities become a meaningful contributor to multi-asset income returns? The convertibles market has evolved, with a growing number of growth-oriented issuers, including companies connected to artificial intelligence and related infrastructure spending. In late 2026, it’s evolving further, due to robust issuance from well-established companies in a broader range of sectors.
How can convertible bonds provide exposure to important market themes while helping manage risk? Convertible securities combine elements of both stocks and bonds. Their embedded conversion feature can allow investors to participate in equity upside while the bond component may provide a degree of downside support relative to owning common stock outright.
Why are active managers often attracted to this market? Convertible securities can be complex, with each issue possessing its own credit profile, conversion terms, equity characteristics, and issuer-specific risks. These features may create opportunities for active security selection.

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Convertible securities: An evolving opportunity within MAI strategies