However, with international bonds, potential investors should be aware of how changes in currency rates can affect overall returns.
“Currency is three times as risky as bond risk,” Phillips added. “Unhedged international bonds actually increase the risk of a portfolio.”
Some foreign bond ETFs without U.S. exposure include:
- SPDR Barclays International Treasury Bond (NYSEArca: BWX): 1.63% 30-day SEC yield
- Vanguard Total International Bond ETF (NYSEArca: BNDX): 1.59% 30-day SEC yield
- iShares International Treasury Bond ETF (NYSEArca: IGOV): 1.39% 30-day SEC yield
- SPDR Barclays Capital Short Term International Treasury Bond ETF (NYSEArca: BWZ): 0.63% 30-day SEC yield
- iShares 1-3 Year International Treasury Bond ETF (NYSEArca: ISHG): 0.39% 30-day SEC yield
- PowerShares International Corporate Bond Portfolio (NYSEArca: PICB): 2.26% 30-day SEC yield
For more information on bonds, visit our bond ETFs category.
Max Chen contributed to this article.