Over the cliff with reverse convertibles

Key Points Reverse convertibles increase returns and risks The risks are often disguised within complicated payoff arrangements Recently, some investors have lost a significant portion of their capital The Product In our last Super Insights article we looked at capital protected products (CPPs). They’re safe as far as getting your money back is concerned but boring on the returns. Reverse convertibles are the opposite. This is a supercharged, high-octane investment (try 15% a year or more) for thrill-seeking income investors, if indeed there can be such a thing. A reverse convertible is a high yield instrument where the repayment...

In our last Super Insights article we looked at capital protected products (CPPs). They’re safe as far as getting your money back is concerned but boring on the returns.

Reverse convertibles are the opposite. This is a supercharged, high-octane investment (try 15% a year or more) for thrill-seeking income investors, if indeed there can be such a thing.

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