The Best 2018 Bond Strategy Has a Stock-Market Problem

The first three quarters of 2018 were rough for bond investors of many stripes. But not for Alan Muschott at Franklin Templeton Investments.

Heading into October, his $3.6 billion Franklin Convertible Securities Fund had returned almost 15 percent in 2018, better than any of the other more than 500 U.S. fixed-income mutual funds with at least $1 billion in assets, according to data compiled by Bloomberg. Along with fellow managers Matt Quinlan and Eric Webster, Muschott seeks out what he described as “balanced convertibles,” which capture most of any upside move in a company’s share price but only about half of the downside.