Investors are compensated for the risk. CWB has a current yield of 3%. More importantly, the ETF is up nearly 18% this year, a performance that easily outpaces the Vanguard Total Bond Market ETF (NYSEArca: BND) as well as the largest Treasury, high-yield and municipal bond ETFs. CWB has also been less volatile than ETFs holding long-dated Treasuries. [Convertible ETFs Races to All-Time High]
And if U.S. interest rates rise in earnest, remember the ticker CWB. “Over the past 20 years when the ten-year Treasury yield rose one percentage point or more, convertibles delivered negative returns in only one of those periods and posted double-digit gains in six,” according to Calamos Investments data cited by Kiplinger’s.
SPDR Barclays Convertible Securities ETF
ETF Trends editorial team contributed to this post.