iShares Convertible Bond ETF

iShares Convertible Bond ETF (ICVT) tracks a Bloomberg index of U.S. dollar convertible bonds with at least $250 million outstanding. A convertible bond is a company bond that the holder can swap for a set number of the issuer's shares. The fund's 0.20% expense ratio is half the 0.40% charged by its closest match, SPDR Bloomberg Convertible Securities ETF (CWB). It tends to swing more like a stock fund than a typical bond fund and leans heavily toward technology issuers.

• Over the year to Oct 27, 2026, ICVT returned +4.5%, 2nd of 6 among similar funds.
• Its 5-year annualized return was +4.3% and its 10-year +11.9%.
• In the 2020 COVID crash it fell 32.2% and regained its old high 2.4 months after the low.
• Its worst full calendar year was 2022 (-20.7%); its best was 2020 (+61.0%).
• The deepest fall in its price history was 33.1% (Feb 12, 2021 to Jun 16, 2022), recovered by Sep 8, 2025.

As of Jul 31, 2026, the fund held 375 securities; the ten largest made up 12.78% of assets.

The bonds mature in 3.9 years on average (weighted by size), with an average coupon of 1.54%.

• Over the three months to Jul 31, 2026, investors added a net $1.13B (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +7.33%, +0.80%, -6.71%.

ICVT follows the Bloomberg U.S. Convertible Cash Pay Bond >$250MM Index. This index is a slice of the broader Bloomberg U.S. Convertibles Index. It keeps only "cash pay" convertibles, which are bonds that pay regular interest. Zero-coupon, preferred and mandatory convertibles are left out. To qualify, a bond must be in U.S. dollars, have at least 31 days to maturity and have $250 million or more outstanding. It must also be registered with the SEC or issued under Rule 144A. Bonds may be investment grade, high yield (lower-rated "junk" bonds) or unrated. Each bond is weighted by its market value, so larger issues count for more. The index is rebalanced on the last business day of each month.

BlackRock Fund Advisors uses "representative sampling." Instead of buying every bond in the index, it holds a group of bonds chosen to match the index's interest-rate sensitivity, credit quality, yield and industry mix. At least 80% of assets must be in index bonds. As of July 31, 2026, the fund held 375 issues, about 0.95% cash and no derivatives. It may lend out up to one-third of its assets.

One mechanical detail matters. The index never converts bonds into stock, so the fund generally doesn't either, even when converting would pay. A convertible's price still tends to move with the issuer's shares. As a result, holders take on stock-market risk as well as interest-rate and credit risk.

• ICVT charges 0.2% a year, versus an average of 0.63% for the similar funds below (1st of 6, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $20 in the first year and $255 over 10 years (assuming a 5% annual return).

Convertible bonds tie much of ICVT's return to stock prices, so it has fallen sharply in sell-offs rather than cushioning them the way most bond funds aim to.

ICVT may add growth potential with some bond features, but it has not acted as a shock absorber. It launched in June 2015, so it has no record from 2008. It fell 32.2% from February 19 to March 23, 2020, then recovered by June 5, 2020. It lost 20.86% in 2022, its worst calendar year. Its deepest drop was 33.1%, from February 2021 to June 2022, and it took 38.8 months to recover, until September 2025. Anyone who had to sell shares during those stretches would have locked in losses. Income is modest: the trailing 12-month yield was 1.5% as of October 27, 2026, paid monthly. Costs are low at 0.20%, which works out to $20 in the first year on $10,000 in the SEC's standard example. Past results don't predict future ones, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).