Foreign bond exchange traded funds (ETFs) have hit the market, and the timing is perfect. SPDR Lehman International Treasury Bond Fund (BWX) is a broad-based ETF that gives exposure to 17 counties: 13 of which are developed, and four that are emerging. The largest allocations are to Japan, Germany and Spain, with the heaviest weighting in Japan because of the enormous debt outstanding. Roger Nusbaum for TheStreet.com reports that all of the exposure to Japan means a low yield, but the low yield there is offset with higher yields from South Africa, Mexico and Poland.
In general, keeping a portion of your bond portfolio in foreign funds can protect against a falling dollar. Likewise, it also can give exposure to a specific currency.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.