European convertible bonds offered greater returns than equities and at a lower level of risk over the past seven years, according to Merrill Lynch.

The bank's Convertibles for Equity Investors report said that the annualised return for convertible bonds between November 3, 1995 and June 28, 2002 was 14%, higher than for both equities and bonds. Convertibles performance was measured against the VR30, a European sub-index of the ML G300, Merrill's global convertibles index composed of 300 issues.