Spiking equity volatility boosts convertible bond funds

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Spiking equity volatility boosts convertible bond funds

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(200310) -- NEW YORK, March 10, 2020 (Xinhua) -- Electronic screens show the closing numbers at the New York Stock Exchange (NYSE) in New York, the United States, March 9, 2020. U.S. stocks plunged on Monday with the Dow closing down more than 2,000 points amid anxieties for a possible all-out oil price war and economic slowdown from the spreading coronavirus. The Dow Jones Industrial Average cratered 2,013.76 points, or 7.79 percent, to 23,851.02. The S&P 500 was down 225.81 points, or 7.60 percent, to 2,746.56. The Nasdaq Composite Index shed 624.94 points, or 7.29 percent, to 7,950.68. All three benchmarks notched their worst daily declines in years. (Xinhua/Wang Ying) | Wang Ying/Xinhua News Agency/PA Images

Europe’s convertible bond market is positioned to benefit from spiking volatility in equity markets due to the convexity of the asset class, which could lead to an increase in primary issuance in the future.

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