Wellesley Taps Hot Convertible Market with New Actively Managed ETF

PORTSMOUTH, N.H. – March 25, 2026 – Wellesley Asset Management, a veteran investment firm specializing in convertible securities, today launched the Miller Convertible Total Return ETF (MCVT) on the NYSE Arca. The move brings the firm's decades of niche expertise into the rapidly growing exchange-traded fund arena, offering investors a new tool to navigate an increasingly complex market landscape.

The new fund is an actively managed ETF designed to maximize total return through a combination of current income and capital appreciation, all while emphasizing the capital preservation that has become a hallmark of Wellesley's investment philosophy.

"Wellesley has spent decades refining a disciplined approach to convertible investing," said Michael Miller, CEO of Wellesley Asset Management, in the official announcement. "The launch of MCVT brings our expertise to the ETF marketplace, offering investors a liquid, transparent, and cost-efficient way to access the convertible asset class."

The Hybrid Advantage in a Volatile Era

MCVT's launch comes at a time when its target asset class, convertible securities, is experiencing a significant resurgence. These hybrid instruments, which blend the characteristics of both stocks and bonds, are gaining traction for their unique risk-reward profile. A convertible bond pays interest like a traditional bond but also gives the holder the option to convert it into a predetermined number of the issuing company's common shares.

This structure offers what many analysts describe as the "best of both worlds": the potential for equity-like upside when a company's stock rises, coupled with the downside protection and income stream of a bond. This duality makes them particularly compelling in the current climate of market volatility and uncertain economic direction.

Recent history underscores their resilience. In 2025, a standout year, the convertible asset class delivered a remarkable 21.4% return, significantly outpacing global equities (19.0%), global high yield bonds (8.5%), and the global aggregate bond index (4.9%). Critically, it achieved this with an annualized volatility of just 9.5%, compared to 14.9% for global equities, demonstrating its ability to buffer against market turbulence.

This performance is not an anomaly. Historical data shows that during periods of high market volatility, convertibles tend to outperform equities while limiting losses during downturns. For instance, during a past period of intense tariff-driven volatility where global equities fell 11%, convertible bonds declined by a much more modest 4.5%.

A Booming Market for Convertibles

The timing of Wellesley's new ETF is far from coincidental. The global convertible bond market is in the midst of what some experts are calling a "structural renaissance." After years of steady growth, the market surpassed $300 billion in total value in 2025 for the first time since 2020. Issuance has been a primary driver, with global companies raising a near-record $166.5 billion through convertibles in 2025 alone.

Several factors are fueling this boom. For issuers, particularly high-growth companies in sectors like artificial intelligence, electric vehicles, and energy transition, convertibles offer a flexible and cost-effective way to raise capital. They can offer lower coupons than traditional debt and defer the potential dilution of their equity. With borrowing costs remaining elevated, this financing route has become increasingly attractive.

For investors, the surge in issuance has created a deep and diverse opportunity set. Furthermore, a massive wave of refinancing is expected over the next two years, with approximately $180 billion of convertibles set to mature across 2026 and 2027. This activity is expected to sustain issuance volumes and provide a steady stream of new investment opportunities for active managers like Wellesley.

Wellesley's Niche Expertise Enters the ETF Arena

While the market is hot, navigating the complexities of convertible securities requires specialized knowledge. This is where Wellesley Asset Management aims to differentiate MCVT. Founded in 1991, the firm has built its reputation over three decades by focusing exclusively on this asset class, managing approximately $2 billion in assets for individuals, advisors, and institutions.

The firm's philosophy centers on a disciplined, multi-step process rooted in fundamental analysis. It seeks to identify undervalued convertible securities from financially sound companies, focusing on what it calls the "sweet spot": balanced, "at the money" convertibles that offer the most attractive risk/reward profile. This approach avoids both highly appreciated convertibles that behave more like volatile stocks and "busted" convertibles that trade like high-yield junk bonds.

The decision to package this active strategy into an ETF structure is significant. It democratizes access to an asset class that was once the primary domain of institutional investors. The ETF vehicle provides daily transparency, intraday liquidity, and typically lower costs compared to traditional mutual funds.

"The Miller Convertible Total Return ETF is a complementary strategy to our existing suite of mutual funds, providing our clients with another avenue to invest in this dynamic asset class," added Portfolio Manager Jim Buckham. Chief Investment Officer David Clott noted that "MCVT, as an actively managed ETF, is an efficient way to access the exciting return profile of convertible bonds."

Navigating the Competitive ETF Landscape

MCVT enters a convertible ETF space that, while relatively small with just over $10 billion in total assets, features established players. The largest funds, like the SPDR Bloomberg Convertible Securities ETF (CWB) and the iShares Convertible Bond ETF (ICVT), are passively managed, designed to track a broad market index. Their portfolios are often heavier in fixed-income characteristics.

In contrast, MCVT joins a smaller group of actively managed ETFs, such as the Calamos Convertible Equity Alternative ETF (CVRT), which has also seen strong performance by focusing on convertible bonds with higher equity sensitivity. Proponents of active management in this space argue it is essential for success. An active manager can perform the rigorous credit, equity, and structural analysis required for each security, potentially identifying mispriced opportunities and dynamically adjusting the portfolio's risk profile in response to changing market conditions—a flexibility that index-based funds lack.

The launch of MCVT provides a new option for investors who believe in the value of active selection within this nuanced market. As with any new fund, it arrives with no operating history, and investors are encouraged to carefully review the fund's prospectus to understand its strategy, fees, and the specific risks associated with convertible securities, active management, and the ETF structure itself.