What sectors issue the most convertible bonds and why?

Technology sector dominance: technology companies are the largest issuers of convertible bonds for several reasons: high equity volatility makes the embedded conversion option more valuable (options on volatile stocks are worth more), allowing tech companies to issue convertibles at very low or zero coupons; many technology companies are unprofitable or reinvesting all cash flows into growth, making regular interest payments on straight debt challenging but convertible's low coupon more manageable; investors in tech convertibles expect the equity option to be the primary return source; the ICVT and CWB portfolios are typically 40-60% technology sector exposure. Healthcare/Biotech: similar to technology, biotech companies have high stock price volatility (binary clinical trial outcomes) that makes their embedded convertible option valuable; biotech companies often lack revenue or profitability to support traditional bond interest payments; zero-coupon or very low coupon convertibles are common in biotech. Consumer discretionary: e-commerce and consumer technology companies have been significant convertible issuers. Who buys convertibles: hedge funds specializing in convertible arbitrage (buying convertibles while shorting the underlying stock to capture the embedded option premium); outright convertible bond mutual funds and ETFs; balanced fund managers seeking equity-like returns with bond characteristics. Why convertible supply matters: ICVT and CWB can only hold existing convertibles; their portfolio characteristics are determined by which companies issued convertibles; in periods of low equity volatility or low equity market activity, convertible issuance falls and the convertible universe shrinks; in bull markets and high volatility periods, convertible issuance increases.

How do convertible bonds perform in different market environments?

Bull equity market (stocks rising): convertibles perform well — as underlying stocks rise above conversion prices, convertible bonds gain equity-like appreciation; the portfolio 'delta' increases as more convertibles become in-the-money; total returns can approach equity returns in strong bull markets. Bear equity market (stocks falling): convertibles provide partial protection — the bond floor (the bond's value without the equity option) provides support; in the 2022 bear market, convertible ETFs fell less than equities but more than investment-grade bonds; the equity sensitivity works both ways. Rising interest rate environment: hurts convertibles in two ways: the bond floor value falls as rates rise (reducing downside protection); the equity option value may also decline if rate-sensitive growth stocks fall; 2022 was challenging for convertibles because both rising rates AND falling equity prices hurt the asset class. Falling interest rate environment: generally positive for convertibles — bond floor value rises as rates fall; growth stocks (dominant in convertible issuers) often benefit from low rates; the combination of rising bond values and rising equity values benefits convertibles. Credit stress: convertible bond issuers are often below-investment-grade or unrated; in credit crises, the credit spread component of convertibles widens (hurting bond floor value) while equity prices also fall (reducing option value); convertibles are NOT safe havens in credit crises. Best environment: strongly rising equity markets with stable interest rates maximize convertible returns; the combination of equity appreciation and stable bond floor creates the classic 'best of both worlds' convertible performance.

How should investors think about convertibles as a portfolio allocation?

Asset class positioning: convertibles occupy a middle ground between investment-grade bonds (low yield, low equity sensitivity) and equities (high return potential, high volatility); convertibles provide equity upside participation with reduced downside vs. owning the stock directly; the trade-off is lower current income than comparable high yield bonds and lower equity participation than owning the stock directly. Portfolio role: convertibles are typically used in balanced portfolios (with both equity and bond exposure) as a transition zone between the two; they can serve as a lower-volatility growth vehicle (vs. pure equity) or as a higher-return income vehicle (vs. pure bonds); some portfolio managers use convertibles to provide equity-like expected returns with bond-like characteristics for liability-matching or volatility-managed mandates. Size considerations: the U.S. convertible market is approximately $300-400 billion in outstanding face value — much smaller than the $10+ trillion investment-grade corporate bond market or the multi-trillion equity markets; the smaller market size creates some liquidity limitations for large institutional investors; retail and smaller institutional investors can access the convertible market more efficiently through ETFs than through direct bond purchase. Alternative perspectives: passive convertible ETFs (ICVT, CWB) have underperformed active convertible bond managers in some periods because active managers can time convertible issuance purchases, manage delta exposure, and trade convertible arbitrage relationships; convertible investing is one area where active management has shown more evidence of adding value vs. passive; investors comfortable paying active management fees may consider active convertible funds alongside or instead of ETFs.

brimindinvest.com / compare / icvt-vs-cefLIVE

ICVT

iShares Convertible Bond ETF · ETF - Convertible Bonds

$117.08

-0.89% this month

VERSUS

⟷

COMPARE

CWB

SPDR Bloomberg Convertible Securities ETF · ETF - Convertible Bonds

$104.65

-0.78% this month

Scoreboard verdict

Across expense ratio, momentum, yield, fund size, risk

ICVT

4

CWB

1

ICVT LEADS 4/5

Comparison scoreboard

ICVT LEADS 4/5

Exp. Ratio

ICVT ✓0.20%

CWB 0.40%

1Y Return

ICVT ✓+31.65%

CWB +27.78%

Div. Yield

ICVT 1.31%

CWB ✓1.37%

AUM

ICVT ✓$7.53B

CWB $6.2B

Beta

ICVT ✓0.66

CWB 0.72

Metrics last refreshed: 7/9/2026

Quick take

ICVT vs CWB ETF Comparison: AI Score, Valuation, Performance and Upside

ICVT (iShares Convertible Bond ETF) and CWB (SPDR Bloomberg Convertible Securities ETF) are both U.S. convertible bond ETFs providing hybrid bond-equity exposure — ICVT tracks the broader ICE BofA US Convertible Index at a lower 0.20% expense ratio, while CWB tracks the more liquid Bloomberg US Convertible Liquid Bond Index at 0.40% expense ratio with the largest convertible ETF AUM and institutional adoption.

ICVT vs CWB is lower-cost, broader convertible bond market access (iShares' 0.20% expense ratio on ICE BofA US Convertible Index including smaller issues, monthly income, and equity upside participation) versus most liquid convertible bond ETF with maximum institutional credibility (SPDR's 0.40% expense ratio on Bloomberg Liquid Convertible Index, largest convertible ETF AUM and tightest trading spreads — paying twice the expense ratio primarily for institutional trading liquidity).

Live analysis · updated 7/9/2026

ICVT holds the edge across 4 of 5 key metrics in this comparison. ICVT has delivered stronger 1-year price return (+31.65% vs +27.78% for CWB).

Normalized 1Y performance

ICVT

CWB

Recent returns

ICVT

CWB

Who should consider this stock?

ICVT may suit investors who:

→Want lower-cost convertible bond exposure at 0.20% expense ratio with broad market representation including smaller convertible issues across the full ICE BofA US Convertible Index
→Value the hybrid equity-bond nature of convertibles for portfolio positioning that participates in equity upside while maintaining some bond floor protection in market downturns
→Use convertibles as a tactical or strategic allocation in technology and growth company exposure with income component unavailable from pure equity positions

CWB may suit investors who:

→Need maximum convertible bond ETF trading liquidity for institutional-scale positions requiring tight bid-ask spreads and deep secondary market with minimal market impact
→Value CWB's established position as the most widely adopted convertible bond ETF for institutional asset allocation and the SPDR brand's credibility in institutional fixed income markets
→Prioritize the most liquid convertible bond universe (Bloomberg Liquid Bond Index) to minimize NAV tracking errors and liquidity mismatch risk during convertible market stress

Performance & AI score

Metric	ICVT	CWB
ETF score	67.0	64.0
Latest close	$117.08	$104.65
1M return	-0.89%	-0.78%
6M return	+15.23%	+13.54%
1Y return	+31.65%	+27.78%

$10,000 invested — hypothetical growth (dividends reinvested)

How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?

Period	ICVT	CWB
1Y ago	$13.35K (+33.5%) started 2025-07-08	$12.96K (+29.6%) started 2025-07-08
5Y ago	$16.08K (+60.8%) started 2021-07-08	$14.96K (+49.6%) started 2021-07-08
10Y ago	$51.17K (+411.7%) started 2016-07-08	$44.41K (+344.1%) started 2016-07-08

Hypothetical — past performance does not guarantee future results.

Fund characteristics

Metric	ICVT	CWB
Expense ratio	0.20%	0.40%
Total assets (AUM)	$7.53B	$6.2B
Dividend yield	1.31%	1.37%
Trailing P/E	N/A	N/A
Beta	0.66	0.72
52-week change	31.65%	27.78%

Risk & fund metrics

Metric	ICVT	CWB
1Y return	+31.65%	+27.78%
6M return	+15.23%	+13.54%
1M return	-0.89%	-0.78%
1Y Sharpe ratio	1.51	1.36
Beta	0.66	0.72
Dividend yield	1.31%	1.37%
5Y CAGR	+6.38%	+6.19%

Drawdown & downside risk

Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.

1Y risk snapshot

ICVT max drawdown7.55%

CWB max drawdown7.52%

ICVT max wkly drop5.82%

CWB max wkly drop5.57%

5Y risk snapshot

ICVT max drawdown29.95%

CWB max drawdown28.41%

ICVT max wkly drop10.83%

CWB max wkly drop9.97%

10Y risk snapshot

ICVT max drawdown33.25%

CWB max drawdown32.06%

ICVT max wkly drop19.53%

CWB max wkly drop18.75%

Performance metrics by period

Period	Metric	ICVT	CWB
1Y	Growth	+31.65%	+27.78%
	CAGR	+31.67%	+27.80%
	Sharpe ratio	1.51	1.36
	Max drawdown	7.55%	7.52%
	Max daily drop	4.19%	4.04%
	Max wkly drop	5.82%	5.57%
5Y	Growth	+36.25%	+35.00%
	CAGR	+6.38%	+6.19%
	Sharpe ratio	0.19	0.18
	Max drawdown	29.95%	28.41%
	Max daily drop	4.50%	4.19%
	Max wkly drop	10.83%	9.97%
10Y	Growth	+254.31%	+216.27%
	CAGR	+13.49%	+12.21%
	Sharpe ratio	0.60	0.56
	Max drawdown	33.25%	32.06%
	Max daily drop	10.18%	9.13%
	Max wkly drop	19.53%	18.75%

Fund overview

Category	ICVT	CWB
Fund name	iShares Convertible Bond ETF	State Street SPDR Bloomberg Convertible Securities ETF
Type	ETF	ETF
Expense ratio	0.20%	0.40%
Total assets (AUM)	$7.53B	$6.2B
Dividend yield	1.31%	1.37%

ICVT strengths

→Equity upside participation with bond floor protection — convertible bonds participate in stock price appreciation when the underlying equity rises (the conversion option gains value) while the bond floor (the value of the bond if you ignore the conversion option) provides downside support below the stock price
→Technology and growth sector concentration reflects where convertibles are most common — technology companies, particularly those that are unprofitable or early-stage, frequently issue convertible bonds because they can offer lower coupon rates in exchange for equity upside; this sector bias benefits from technology sector growth
→Monthly income from coupon payments — convertible bonds pay regular coupons (typically 0.5-2.5%), providing income while holding the equity option

CWB strengths

→Largest and most established convertible bond ETF with superior trading liquidity — CWB's large AUM and long history create tight bid-ask spreads and deep secondary market liquidity for institutional and retail investors needing large-block convertible exposure
→Focus on most liquid convertible issues reduces liquidity risk — CWB's Bloomberg Liquid Bond Index requires minimum outstanding face value, ensuring the fund holds the most tradeable convertibles; this reduces NAV tracking errors in stressed markets
→SPDR brand and institutional adoption — CWB is widely used by institutional asset allocators as the primary convertible bond exposure vehicle; broad institutional adoption creates a virtuous cycle of liquidity

Risks to watch — ICVT

→Convertible bonds underperform in sideways or declining markets — when the underlying stock doesn't rise above the conversion price, the convertible bond provides only the coupon income (which is below comparable non-convertible bonds); investors who don't need equity upside pay an implied cost for the conversion option that may not be realized
→Rising interest rates hurt bond floor value — as rates rise, the underlying bond component of convertibles loses value, reducing the bond floor protection; in a rising rate environment, convertibles provide less downside protection than expected
→Credit risk from below-investment-grade issuers — many convertible issuers are growth companies without investment-grade credit ratings; if the issuer's business deteriorates (without the stock rising to trigger conversion), the convertible bond holder faces credit risk similar to high yield bonds

Risks to watch — CWB

→Higher expense ratio (0.40%) vs ICVT (0.20%) — CWB charges twice ICVT's expense ratio; long-term investors pay significantly more in absolute fee terms; without superior performance, CWB's higher cost is a disadvantage
→Stricter liquidity criteria may exclude smaller, potentially higher-yielding convertibles — ICVT's broader index may capture more of the full convertible market vs. CWB's liquid-only focus
→Both funds face identical convertible market risks — the fundamental risks of convertible bonds (credit risk, interest rate sensitivity, equity option value decay) are shared by ICVT and CWB; the difference is primarily cost and liquidity

Frequently asked questions

Convertible bond definition: a convertible bond is a corporate bond that includes an embedded option allowing the bondholder to convert the bond into a predetermined number of the issuer's common shares at a specified price (the 'conversion price'); example: a company issues a 5-year convertible bond with face value $1,000, 1.5% annual coupon, and conversion price of $50 per share; the bondholder can convert each $1,000 bond into 20 shares ($1,000 / $50) at any time; if the stock rises to $80, the 20 shares are worth $1,600 — the convertible's conversion value is $1,600, so the bond should trade near $1,600. Bond floor: the convertible's 'bond floor' (also called investment value) is what the bond would be worth without the conversion option — the present value of its future coupon payments and principal repayment discounted at the yield of comparable non-convertible bonds; the bond floor provides downside protection — even if the stock falls, the convertible should not fall below its bond floor (as long as the issuer doesn't default). Why companies issue convertibles: companies pay lower coupon rates on convertibles (because investors receive equity option value); startups and growth companies with high equity option values can issue convertibles at 0-2% coupons vs. 7-10% for straight high yield bonds; convertibles allow growth companies to access debt capital at lower borrowing costs. Convertible 'delta': the sensitivity of a convertible bond's price to the underlying stock's price change is called its 'delta'; a deep out-of-the-money convertible (stock far below conversion price) has low delta — it behaves more like a bond; an in-the-money convertible (stock well above conversion price) has high delta — it behaves more like equity.

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+1.1%HOLD

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