Despite losing ground after the collapse of Lehman Brothers in September 2008, confidence in the convertibles market has rebounded. Certainly, risk-averse investors have been more reluctant than previously to take equity while the low yields currently available on cash and government bonds are leaving many searching for more attractive but still secure sources of income.

Convertibles offer investors the security of debt with an opportunity for capital growth. The best of both worlds? Warren Buffett seemed to think so…recent examples include Berkshire Hathaway's $5bn investment in Goldman Sachs and $3bn investment in General Electric.