SPDR Barclays Capital Convertible Securities (CWB) are the only convertible-bond ETFs. It is one of the fastest-growing Exchange-Traded Funds. The convertible-bond market is relatively small and it can be illiquid. The convertible-bond ETFs are more suitable for active portfolio management. The ETF may take a loss when a convertible bond is purchased for a higher price than its conversion value. A convertible bond is a type of bond issued by a corporation that, unlike a regular bond, gives the holder the option to convert it into a shares in the company that issued it. These types of bonds are often issued by companies with a low credit rating and high growth potential. The major benefit related to profit making by issuing convertible bonds is a reduced cash interest payment. If the bonds are converted into stocks, then companies’ debt shrinks. By issuing convertible bonds a company has a chance to mitigate negative investor interpretation of its corporate actions. A convertible bond is a hybrid product of both debt and equity.
|Symbol||Company Name||Price||Change||Total net assets||Total expense ratio|
|CWB||SPDR Barclays Capital Convertible SecETF||46.41||0.56%||0.4%|