The State Street SPDR Bloomberg Convertible Securities ETF (CWB) has delivered impressive performance with a 20.09% return over the past year, making it an attractive option for investors looking to gain exposure to convertible securities. With a dividend yield of approximately 1.70%, CWB stands out for its consistent payouts while demonstrating lower volatility compared to the S&P 500, as indicated by its beta of 0.52. This strong performance, coupled with a 5-year return of 7.23%, reinforces its appeal for those seeking reliable investment opportunities.
Pros:
- Strong performer with a 16.25% one-year return
- Invests in convertible securities
Cons:
- Market volatility risk
- Potential for lower returns in a rising interest rate environment
2.iShares Convertible Bond ETF
ICVT (NYSE)
The iShares Convertible Bond ETF (ICVT) has emerged as a top-performing bond ETF, delivering a robust one-year return of 21.30% as of January 2026. With a low expense ratio of just 0.20%, this ETF offers investors a strategic focus on convertible bonds, blending income generation with the potential for capital appreciation. Ideal for those seeking a balanced risk-return profile, ICVT is well-diversified across various sectors, making it a compelling choice for income-oriented investors.
Pros:
- Top-performing bond ETF
- Focus on convertible bonds
Cons:
- Lower yield compared to other investments
- Market volatility risk
3.Vanguard Total Bond Market ETF
BND (NYSE)
The Vanguard Total Bond Market ETF (BND) offers broad exposure to U.S. investment-grade bonds, making it a solid choice for diversification. With a low expense ratio of 0.03%, it provides an attractive dividend yield of 3.85% and has delivered a 1-year return of 4.29%. Although the fund has experienced volatility, it remains a reliable option for investors looking for a balanced bond portfolio.
Pros:
- Broad U.S. investment-grade bond exposure
- Low expense ratio of 0.03%
Cons:
- Underperformed cash over the past decade
- Vulnerable to price declines from interest rate increases
Final Words
As you consider your investment options this January, take time to compare the best bond ETFs available, like the Vanguard Total Bond Market ETF, which offers broad exposure and low costs. You can explore these opportunities further to make informed decisions that align with your financial goals.
Frequently Asked Questions
The Vanguard Total Bond Market ETF (BND) provides broad U.S. investment-grade bond exposure. It includes a wide range of public, taxable fixed income securities, making it ideal for diversification.
As of January 2026, BND has a year-to-date performance of 7.4%. However, its 1-year return is 4.29%, indicating mixed performance over the past year.
Yes, BND pays a monthly dividend with a yield of 3.85%. The next dividend payment is expected to be $0.2466, following its last ex-dividend date on December 18, 2025.
Investing in BND carries risks such as potential interest rate increases, long durations, and narrow credit spreads, which could lead to price declines. Additionally, BND has underperformed cash over the past decade despite recent gains.
When comparing bond ETFs, consider factors such as expense ratios, historical performance, and the types of bonds included in the fund. It's also important to evaluate the current economic climate and interest rate trends, as these can impact bond prices.
A good long-term investment strategy with bond ETFs includes diversifying your bond holdings across various sectors and durations. This helps mitigate risk while aiming for returns that may exceed cash over time.
