BWX also features exposure to nine Eurozone countries, a plus when the ECB appears comfortable in a dovish posture. Other country weights include 1.2% to Sweden, itself a recent rate cutter, and 4.6% to South Korea, a country that may be forced to seriously consider multiple rate reductions to weaken the won.
“State Street Global Advisors expects global central banks to remain accommodative and for interest rates to stay low through the end of the year, which is a favorable backdrop for international treasuries. Accelerating global growth tends to put downward pressure on sovereign credit spreads, which may continue to be a major source of return going forward,” said Mazza.
Investors do not sacrifice credit quality by opting for BWX over a U.S. Treasury ETF. Nearly 78% of the ETF’s 567 holdings are rated Aaa or Aa. BWX features a modified adjusted duration of 7.21 years and an average yield to worst of 1.55%. [Spotlight on an International Treasury ETF]
SPDR Barclays International Treasury Bond ETF
Tom Lydon’s clients own shares of BWX.