The index holds bonds issued by investment-grade non-U.S. issuers in the G-10 currencies, including the Australian dollar (AUD), New Zealand dollar (NZD), British Pound (GPB), Swiss Franc (CHF), Euro (EUR), Norwegian krone (NOK), Japanese yen (JPY), Swedish krona (SEK), Canadian dollar (CAD) and Danish krone (DKK). PICB will have an expense ratio of 0.50%.
As with many bond ETFs, PICB will use a “sampling” methodology, which means that the fund won’t own all the securities in the underlying index.
PICB only holds the debt of companies outside the United States and has exposure to the nine major sectors. Aside from broad country and sector exposure, PICB also has currency diversification, capping the exposure of any one currency at 50%.
PICB will compete with State Street‘s SPDR Barclays Capital International Corporate Bond (NYSEArca: IBND), which launched in mid-May. [New Fund: Corporate Bond ETFs Go International.]
For more information on corporate bonds, visit our corporate bonds category.
Max Chen and Heather Hayes contributed to this article.