Plenty of fixed income exchange-traded funds are benefiting from the Federal Reserve's reluctance to raise interest rates this year. That group includes, but is not limited to U.S. government bond funds, emerging markets debt ETFs and high-yield corporate bond offerings.
Predictably, the corners of the bond market and the ETFs offering exposure to those areas that would be alright with higher interest rates are being pinched. That includes convertible bonds and ETFs such as the SPDR Barclays Capital Convertible SecETF (NYSE: CWB), the largest ETF dedicated to convertible bonds.
“Convertible bonds are a type of hybrid fixed-coupon security that allow the holder the option to swap the bond security for common or preferred stock at a specified strike price. Due to the bond’s equity option, convertible bonds typically pay less interest than traditional corporate bonds,” according to ETF Trends.
/www.benzinga.com/news/16/04/7871048/fed-pain-for-these-bond-etfs alt=Fed Pain For These Bond ETFs>Full story available on Benzinga.com
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