CWB - ICVT: A Convertible Bond Fund For Those Unsure What Comes Next

2024-06-03 10:33:09 ET

Summary

• iShares Convertible Bond ETF offers investors the benefits of equity upside without the same downside exposure.
• The ICVT ETF has a well-diversified portfolio with an effective duration of 1.40 years and a current 30-Day SEC Yield of 3.17%.
• The fund has a dominant exposure to the Tech sector, making it appealing for those bullish on Tech but seeking reduced equity volatility.

I find convertible bonds interesting. These are a unique financial instrument that combines the characteristics of a bond and stock, respectively. A convertible bond includes a conversion feature which gives its owner the right to convert the bond into a specified number of common shares in the issuing corporation at a set conversion price, if such shares trade above the conversion price. If the shares drop below the conversion price, the convertible bond behaves like a bond, with some degree of principal protection and coupon payments....

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