The Perfect Investment for Anyone Planning to ‘Go Away’

by Sam Collins | April 30, 2013 1:29 am

SPDR Barclays Capital Convertible Securities ETF (NYSE:CWB[1]) — This ETF invests at least 80% of its assets in the convertible securities of the Barclays U.S. Convertible Bond Index. Its holdings include Wells Fargo Convertible Preferred, General Motors Convertible, Intel Convertible 3.25% and Gilead Sciences Convertible bonds. It pays an annualized dividend of $1.61 for a current yield of 3.77%.

The securities in the fund are convertible under various terms into the shares of common stock, thus they will generally move with the market but have less volatility.

I first recommended CWB in the Trade of the Day[2] on Feb. 20, at $41.76, saying, “This investment may not have as high a return as a broad-based index but should provide some degree of downside protection because of its dividend yield and the more senior status as a holder of bonds versus stocks.” And I noted, “A break above $42 should result in a continuation of its bull market advance.”

On Monday, CWB broke to a new closing high of $42.98. The ETF should continue heading north while providing an attractive yield. This is an excellent investment for those investors who plan to “sell in May” and are looking for a place to house their capital until October.

04 30 13 cwb 300x199 The Perfect Investment for Anyone Planning to Go Away
Click to Enlarge

chart key 300x84 The Perfect Investment for Anyone Planning to Go Away[3]

  1. CWB:
  2. Trade of the Day:
  3. [Image]:

Source URL:
Short URL: