Schroders Global Investment has pointed out in a recent article that after the volatility in the technology sector this summer, market focus may once again turn to a frequently underestimated investment tool - convertible bonds. Globally, there are approximately $400 billion invested in convertible bonds, which offer investors an attractive choice with the potential for stock growth and the defensive characteristics of fixed income. Schroders Global Investment stated that prior to the sudden market warnings in July, the breadth of its market was narrow, driven mainly by a few large-cap technology companies, while most companies were showing a downward trend with stock prices below their technical average levels. Although the performance of a few stocks may seem unimportant to broad market investors compared to the majority of stocks, the risk brought by crowded trades makes this differentiation more crucial. Following the bursting of the dot-com bubble, commonly referred to as the "lost decade" experienced by global equity investors, convertible bonds provided protection. At that time, many dot-com companies focused on rapid expansion and market share acquisition without a clear profitability path. As investors began to question the long-term viability of these companies, the bubble began to burst, leading to a significant sell-off in tech stocks. Schroders Global Investment stated that the reasons for the bursting of the dot-com bubble included a lack of sustainable business models, high valuations based on speculative profit forecasts, investor reassessments, and the tightening of monetary policy by the Federal Reserve. Following the burst of the dot-com bubble, convertible bonds rebounded quicker compared to global equity markets, including the Nasdaq index. Investors in the Nasdaq only saw positive returns after the global financial crisis. The recovery of global stock markets has been very slow without considering inflation adjustments. Although history does not repeat itself, similar situations often occur. Assuming that the overall financial environment remains favorable, central banks continue to provide ample liquidity, and credit events are avoided or delayed, funds are likely to shift from overcrowded tech trades to other sectors. Companies that find it difficult to attract liquid funds in the traditional corporate bond market may choose to issue convertible bonds, offering low-price equity and high yields. Convertible bonds remain active during periods of liquidity shortage, and initial signs show that the high yield refinancing market is facing challenges. With the anticipated wave of refinancing and tightened credit conditions, convertible bonds show strong defensive capabilities in preventing stock market losses. The defensive qualities in the convertible bond market once again highlight the attractiveness of this asset class, as well as its inherent protective abilities during stock market declines. During the stock market pullback in late July to early August, the advantages of convertible bonds were once again highlighted. They successfully provided protection against sudden market losses. Schroders Global Investment believes that if funds shift from tech stocks to other sectors in the future, convertible bonds may once again play a similar defensive role.