A Stock-Bond Hybrid That Flopped

摘要

Banks sold more than $6 billion of bonds linked to the performance of stocks last year, promising returns of as much as 64 percent at a time when interest rates were at historic lows. Instead of delivering such extraordinary gains, reverse convertibles, as the products are known, lost 1 percent on average in the first 11 months of 2010, according to data compiled by Bloomberg. The Standard & Poor's 500-stock index returned 8 percent during that period and corporate bonds gained 11.1 percent, including reinvested interest, Bank of America Merrill Lynch index data show.