Offering access to over 270 bonds, the SPDR Thomson Reuters Global Convertible Bond UCITS ETF is the first — and only — global convertible bond ETF. [1]
Convertible bonds are debt securities that combine features of both debt and equity. The value of a convertible bond rises if the underlying stock price rises, giving the convertible bond the possibility of rising with equity markets. Meanwhile, the steady stream of coupons provides a degree of downside cushion (sometimes known as a ‘bond floor’) if the issuer’s stock declines. Unlike holding a mix of standard bonds and equities, the advantage of the option to convert into equity means investors could benefit on both sides of the exposure, tracking equity prices higher whilst potentially protecting on the downside due to the bond component.
“Convertible bonds are often described as a plane with multiple engines,” said Claire Perryman, Head of SPDR ETFs for the United Kingdom. “The engines do not all work at the same time, but the hybrid nature of the strategy allows it to successfully navigate multiple market environments. We have seen strong demand for our USD denominated share class since launch in 2014, gathering over $750m in AuM. [2] The launch today of the Euro currency hedged share class of the SPDR Thomson Reuters Global Convertible Bond UCITS ETF equips our clients with another tool to navigate today’s more volatile market environment.”
SPDR ETFs account for over $650bn in global AuM across 247 ETFs, including $29.2bn across 93 European domiciled ETFs and $20.9bn in APAC across 20 ETFs [3].
