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5 Reasons why I am buying convertible ETF SPDR Barclays Capital Convertible Bond ETF (CWB) February 3, 2010

Posted by deminvest in bonds, Convertible Bonds, Defensive Stock, etf, Internet stocks, investment, investment strategies.
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Convertible Bonds are great

Convertible Bonds are Bonds that take advantage of stock performance

 

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.

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