📊 Convertible Bonds Signal a Shift

Good Morning Investors,

Macro headlines continued to set the tone. Markets are pricing Fed rate cuts ahead of the upcoming decision cycle, a backdrop that supports cyclicals and many small-cap growth stories while also amplifying dispersion as concerns about elevated valuations surface.

The convertible bond market has gained +14% year-to-date, providing an alternative, risk-managed channel of exposure to smaller-cap companies as financing and deal activity evolve.

Strategists point out that small-cap performance remains uneven, with clear earnings visibility and cash-flow strength standing out as differentiators.

Matthias Schneider
Editor at Analytica Investor