The SPDR Barclays Convertible Securities ETF (NYSEArca: CWB) is the only convertible bond ETF available. CWB has gained 20.0% over the past year. The CWB comes with a 1.77% 30=day SEC yield.
“Convertible bond funds like CWB tend to behave like a lower-volatility, higher-yielding version of domestic large-cap equities,” according to Morningstar analyst Abby Woodham. “CWB is highly correlated to large-cap U.S. stocks (93% correlated with Morningstar’s large-cap blend category over the past three years), but its swings are less extreme.”
Nevertheless, potential investors should be aware that the securities are still considered debt subject to the issuer’s credit risk. Additionally, the securities can underperform if rates rise while stocks fall.
SPDR Barclays Convertible Securities ETF
For more information on bonds, visit our bond ETFs category.