Like the nemesis from an old slasher movie, reverse convertibles are the investment that won't die.

Not long ago, these bond-like securities, which morph into stocks when the underlying share price plunges, were the rage. Investors in 2008 bought almost $7bn (€5bn) of reverse converts, as the securities are known in Wall Street parlance. But stocks' slide late last year and early this year left thousands of investors with steep losses.