A Few Thoughts on Convertible Bonds and Bitcoin

PortfolioAlert · 2026-03-15T05:03:39+00:00

In recent years, convertible bond index returns have been quite decent and can serve as an alternative to low-risk investments. However, many people overlook the risks behind them. Recently, regardless of the quality of the convertible bond, it can surge to 150 yuan on the day of listing, with a premium rate exceeding 50%, and prices are clearly higher than their intrinsic value. Will investors' tolerance for high convertible bond premiums continue to exist in the future? Clearly not. Once convertible bond values revert to fundamentals, they will inevitably experience significant declines. As for when this value reversion will occur, I don't know, but the risk is already substantial. In my view, at the current stage, convertible bonds should not exceed 40% of asset allocation in a portfolio.

PortfolioAlert

2026-03-15 05:03:39

In recent years, convertible bond gains have been quite good and can serve as an alternative to low-risk investments. However, many people overlook the risks behind them. Recently, no matter how poor the quality of the convertible bonds, they can reach 150 yuan on the first day of listing, with a premium rate of over 50%, clearly exceeding their intrinsic value. Will investors continue to tolerate high premiums on convertible bonds in the future? Obviously not. Once the value of the convertible bonds reverts, they will inevitably experience a significant decline. I don’t know when the value will revert, but the risks are already substantial. Personally, I believe that at this stage, the allocation of convertible bonds in asset portfolios should not exceed 40%.

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