A convertible in finance refers to a type of security, typically a bond or preferred stock, that can be converted into a predetermined number of shares of the issuing company's common stock. This feature allows investors to benefit from potential increases in the company's stock price while still receiving fixed interest payments or dividends. Investors are often attracted to convertibles because they offer a balance between the safety of fixed-income investments and the growth potential of equities. The conversion feature provides an opportunity for capital appreciation, making convertibles a popular choice among those looking to diversify their investment portfolios.