Winning Over Converts

Convertible bond funds can be a prudent entry into an uncertain market

accounts, $500.

Vanguard Convertible Securities (800-662-2739) has the longest history, averaging more than a 9.5% total return over the past 10 years on an annualized basis. The fund was up 12.67% as of October 1996. Its five- year annualized total return was 11.9%, and yielded slightly over 3%. Vanguard’s minimum initial investment requirement is $3,000; $1,000 for IRA accounts.

Key SBSF Convertible Securities Fund (800-539-3863) logged a 13.54% total return as of October 1996, and had a 12.51% five-year-annualized total return. It yielded 4.77%. Despite a solid long-term showing, Key’s fund found the going a bit rough in 1994, with a 6.45% loss that year. The fund requires a minimum initial investment of $500; $250 for IRA accounts.

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