Converted assets can be traced and reclaimed under certain circumstances if they can be identified.
For example a bank account of cash can be converted into a stock portfolio which in turn is used to buy a house that is subsequently sold and put into bonds. As long as the funds can be identified , they can be traced and accounted for and where appropriate by the court, re transferred into the name of the rightful owner.
The law on tracing funds was discussed inter alia in Jasmur Holdings Ltd.v Taynton Developments Inc. 2016 BCSC 1902.
169 With respect to tracing funds , In Tracy (Guardian ad litem of) v. Instaloans Financial Solution Centres (B.C.) Ltd., 2010 BCCA 357 (B.C. C.A.), the Court of Appeal stated
 . . . Although tracing is available both at law and in Equity (see Maddaugh and McCamus, supra, at chapters 6 and 7), the right which the plaintiffs are entitled to trace in this case is the constructive trust, an equitable property right. I agree with Professor Lionel Smith (The Law of Tracing (1997)) that the establishment of this proprietary right, which he refers to as the “proprietary base”, is sufficient to establish an entitlement to trace. It is not necessary, as was once argued, to demonstrate a pre-existing fiduciary relationship: see Citadel General Assurance Co. v. Lloyds Bank Canada,  3 S.C.R. 805 at para. 57.
 Of course, it may be difficult to identify the funds or other property into which the claimed Charges have been transformed or with which they have been mingled; and the process will come to a halt in certain conditions, including where the balance in an account has fallen below the amount being traced. (See generally Maddaugh and McCamus, supra, at Chapter 7, and Smith, supra, at Chapter 8.) As the Court stated in McTaggart v. Boffo (1975) 64 D.L.R. (3d) 441 (Ont. H.C.J.):
Tracing is only possible so long as the funds can be followed in a true sense, i.e., so long as, whether mixed or unmixed, it can be located and identified. It presupposes the continued existence of the money either as a separate fund or as part of a mixed fund or as latent in property acquired by the means of such a fund.
Simply put, two things will absolutely prevent the tracing of trust monies:
- If, on the fact of any individual case, such continued existence of the identifiable trust fund is not established, equity is helpless to trace it;
- the chain for tracing is also broken where the trust fund either in its initial form or a converted