What are convertible bonds and should you buy them?

Since the start of the year, there has been a flurry of convertible bonds being issued. Tim Bennett explains how they work, and reveals one way you can get in on the action.

Since Christmas, investors have been back in the mood to take some risks. Convertible bond issuers have taken note. So far, 2013 has been "the strongest start to the year on record for volumes", according to Alexandra Stevenson at the Financial Times.

This is quite a turnaround not so long ago fund managers were warning that the market "stood on the brink of extinction amid a drought of issuance". So why are convertibles flavour of the month, and should you buy them?

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.