The PowerShares Convertible Securities Portfolio (CVRT) was listed for trading yesterday (5/26/11), becoming the second ETF targeting convertibles. Convertible securities are bonds that the holder can convert into shares of common stock of the issuer. This feature tends to make them more correlated than non-convertible bonds to stock market movements.
CVRT will try to mimic the performance of the BofA Merrill Lynch All U.S. Convertibles Index, which is designed to track the performance of U.S. dollar-denominated investment grade and non-investment grade convertible securities sold into the U.S. market and publicly traded in the United States.
Unfortunately, the PowerShares website does not provide any sector or country allocation data for either the fund or the underlying index. Convertible bond funds have historically been overweight the technology sector. This is something that potential investors should be aware of, and it is a major reason why this missing information is not just desirable,
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