As the manager of the fund, Eric Webster has a mission: Capture 75% of the upside of stocks, while facing only 50% of the downside in more challenging markets. Seeking such an asymmetric performance trade-off—less upside for more downside protection—is typical for investors in the hybrid securities known as convertible bonds, which have qualities of both stocks and bonds. “Convertibles have actually been out of favor since the end of 2021, and that’s because they didn’t provide the downside protection in 2022 and then they didn’t capture the upside participation in the market in 2023 and 2024,” Webster says.