iShares Convertible Bond ETF (ICVT) Covered Calls

The iShares Convertible Bond ETF is an exchange-traded fund that tracks the Bloomberg US Convertible Cash Pay Bond > $250MM Index. The fund provides diversified exposure to U.S. dollar-denominated convertible bonds, which offer a hybrid return profile by combining fixed-income stability with equity-like growth potential. By focusing on cash-pay convertibles, the fund provides a cost-effective way for investors to participate in market rallies while maintaining a degree of downside protection.

You can sell covered calls on iShares Convertible Bond ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for ICVT (prices last updated Fri 4:16 PM ET):

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iShares Convertible Bond ETF (ICVT) is a leading hybrid-asset fund managed by BlackRock. It is designed to capture the unique benefits of convertible bonds—corporate debt that can be converted into common stock—providing a balanced investment that aims for capital appreciation in bull markets and principal preservation in bear markets.

Investment Strategy and Holdings

The fund tracks an index of U.S. convertible bonds with at least $250 million in outstanding issue size. Unlike its peer CWB, ICVT specifically targets "cash-pay" convertibles and generally avoids mandatory convertibles and preferred shares. As of March 2026, the fund is heavily weighted toward growth sectors like Technology and Consumer Discretionary. Core holdings include convertible notes from high-growth and established firms such as Western Digital, Alibaba, Lumentum, DoorDash, and Uber Technologies.

Competitive Landscape

In the convertible ETF space, ICVT is the primary low-cost alternative to the SPDR Bloomberg Convertible Securities ETF. While CWB is older and includes preferreds, ICVT is often favored for its pure-play bond approach and lower 0.20% expense ratio. For investors looking for broader yield or different hybrid structures, the iShares Preferred and Income Securities ETF and the Vanguard Dividend Appreciation ETF are common peers. These funds are highly liquid and support robust options chains, making them ideal for covered call and income-generation strategies.

Strategic Outlook and Performance

The outlook for ICVT is tied to the "delta" of its underlying bonds—how much they move in relation to the issuing company's stock price. In a rising interest rate environment, convertibles often display lower sensitivity than traditional long-term bonds because their conversion feature gains value as equities rise. Innovation in the fund is centered on BlackRock’s efficient sampling and liquidity management, ensuring the fund closely tracks its benchmark even as the underlying convertible market experiences rapid issuance or volatility. This makes it a tactical favorite for traders looking to hedge equity risk without exiting the market entirely.

Management maintains a passive, full-replication approach, ensuring that the fund offers a transparent and predictable window into the U.S. convertible market. By focusing on larger, more liquid issues, the fund minimizes transaction costs and maximizes tradeability for institutional and retail users. For long-term investors, ICVT provides a systematic way to benefit from the compounding of interest payments and the potential for equity conversion, all within a tax-efficient ETF wrapper. Its monthly distributions and active options market provide additional layers of flexibility for portfolio customization and risk management.

Want more examples? ICUI Covered Calls | IDA Covered Calls