Limited Upside For Convertible Bond ETF
A Seeking Alpha Contribution
Summary
- Convertible bonds are highly correlated with stocks making them riskier than regular bonds.
- Convertible bonds have slightly higher income and lower volatility than the S&P 500 Index.
- CWB is the only convertible bond ETF and it stacks up well against mutual fund competition.
An option for investors in search of higher income while maintaining equity exposure, but taking on slightly less risk, is the convertible bond ETF: SPDR Barclays Convertible Securities (NYSEARCA:CWB). The fund offers a higher yield, along with significant correlation to the equity markets, to make it a solid option for investors who may be over weighting assets such as dividend funds in search of income.
Index
CWB tracks the Barclays U.S. Convertible Bond >$500 Million Index. As the name says, bonds must have outstanding issue sizes greater than $500 million…. To continue reading, please Click Here.
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