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Asset Class: Convertible Securities
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Oldest CEF back tested: Bancroft Fund Ltd. (BCV)
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Correlation to U.S. Stock Market: 0.67
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Long-Term Performance: 10.15% CAGR
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S&P 500 Performance: 11.24% CAGR
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Back test timeframe: December 1988 – December 2021
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Number of ETFs & CEFs available in this asset class: 13
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Number of ETFs & CEFs in this asset class that are 5-years old or older: 12
BCV vs S&P 500: December 1988 – December 2021
BCV vs S&P 500: September 2, 1976 – December 31, 2021
The Deep Value ETF Accumulator rankings for the Convertible Securities ETFs & CEFs that are 5-years old or older:
The Deep Value ETF Accumulator rankings for the Convertible Securities ETFs & CEFs that are 10-years old or older:
The 5 top ranked Convertible Securities ETFs & CEFs head-to-head comparisons:
ICVT vs CHY vs CHI vc BCV: July 2015 – December 2021
ICVT vs CHY vs CHI vc BCV: June 5, 2015 – December 31, 2021
CHY vs CHI vs BCV vs ECF: June 2003 – December 2021
CHY vs CHI vs BCV vs ECF: May 28, 2003 – December 31, 2021
Stated objectives of 5 top ranked Convertible Securities ETFs & CEFs:
ICVT – The iShares Convertible Bond ETF seeks to track the investment results of an index composed of U.S. dollar-denominated convertible securities, specifically cash pay bonds, with outstanding issue sizes greater than $250 million. Potential for upside participation and downside protection – Convertible bonds are uniquely positioned to offer the growth potential of stocks, but with the income and downside risk management characteristics of traditional bonds. Seek to guard against rising rates – In rising rate environments, stocks tend to outperform bonds. Since a convertible bond’s price is influenced by the value of its underlying equities, their prices are generally less influenced by changes in interest rates than other fixed income securities. Diversified – Convertible bonds have demonstrated low correlations to traditional bond markets and can potentially provide attractive diversification benefits within a broad portfolio.
CHY – Calamos Convertible and High Income Fund. The Fund seeks total return through capital appreciation and current income by investing in a diversified portfolio of convertible securities and high-yield corporate bonds. Aims to provide consistent income through monthly distributions set at levels the investment team believes are sustainable. Seeks to be less susceptible to rising interest rates than traditional fixed-income funds. Invests in a broad range of security types to actively manage risk/reward characteristics over full market cycles. Judicious use of leverage seeks to enhance overall returns by achieving a positive spread on investments over borrowing costs. The fund offers an attractive monthly distribution and potential way to manage risk by employing securities that engage in upside equity movements with less downside susceptibility.
CHI – Calamos Convertible Opportunities and Income Fund. The Fund seeks total return through capital appreciation and current income by investing in a diversified portfolio of convertible securities and high-yield corporate bonds. Aims to provide consistent income through monthly distributions set at levels the investment team believes are sustainable. By investing at least 80% of its assets in convertible and non-convertible income securities, the fund provides an enhanced fixed-income strategy. Seeks to be less susceptible to rising interest rates than traditional fixed-income funds. Invests in a broad range of security types to actively manage risk/reward characteristics over full market cycles. Judicious use of leverage seeks to enhance overall returns by achieving a net positive spread on investments over borrowing costs. The fund offers an attractive monthly distribution and potential way to manage risk by employing securities that engage in upside equity movements with less downside susceptibility. It seeks to be less sensitive to interest rates by investing in lower-duration bonds.
BCV – Bancroft Fund Ltd., or the Fund, is a closed-end, diversified management investment company and invests primarily in convertible securities, with the objectives of providing income and the potential for capital appreciation; which objectives the Fund considers to be relatively equal, over the long-term, due to the nature of the securities in which it invests.
ECF – Ellsworth Growth and Income Fund Ltd. operates as a closed-end, diversified management investment company and invests primarily in convertible securities and common stock, with the objectives of providing income and the potential for capital appreciation; which objectives the Fund considers to be relatively equal, over the long-term, due to the nature of the securities in which it invests.
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Respectfully yours, Micah McDonald, aka the Deep Value ETF Accumulator
Previous Deep Value ETF Accumulator article on Convertible Securities ETFs & CEFs:
10 Questions & Answers On Convertible Bond ETFs & CEFs 1.4
Disclosure: We currently own shares of ECF and we intend to sell those shares in the next 72 hours. We also intend to buy shares of ICVT in the next 72 hours. I am not a professional investment advisor. Please perform your own due diligence or seek the advice of a Registered Investment Advisor before investing in any security mentioned in this article. This website contains affiliate links to M1 Finance and Google AdSense.