Convertible bond market risk-reward improves as fund managers adjust portfolios

The notable tension here is that managers are calling the risk-reward improved even while overall valuations remain in the high range of the past decade — suggesting the correction has reset relative attractiveness more than absolute cheapness. The concentration of damage in AI-linked telecom and electronics names implies the drawdown was as much a sector unwind as a broad repricing, which matters for anyone holding convertible exposure with embedded equity beta to those themes. Whether fresh capital returns, and whether equity stabilization holds, is the open question; until then, positioning adjustments look defensive rather than conviction-driven.