5 Reasons why I am buying convertible ETF SPDR Barclays Capital Convertible Bond ETF (CWB) February 3, 2010Posted by deminvest in bonds, Convertible Bonds, Defensive Stock, etf, Internet stocks, investment, investment strategies.
1) Convertible Bonds seem great:
- they guarantee returns like Bonds,
- they also offer opportunity to take advantage of stock market growth
- they should be quite safe, because at the end of their lifetime they can give the capital back if stockprice is below convert price
2) SPDR Barclays Capital Convertible Bond ETF (CWB) offers a nice yield: it pays monthly $0.072 which makes yearly $0.864 representing 2.3% of its $37 current price.
3) Expenses for this ETF are 0.4%, which is not too much, even though usually ETF charge less
4) CWB is defensive as compared to stocks. It tracks the S&P 500 but with less volatility and with much less downswing
5) last but not least, CWB is the only ETF for convertible Bonds, so I don’t have much choice.