International bonds can be less sensitive in changes to U.S. interest rates, explaining why the SPDR Barclays Capital International Corporate Bond ETF (NYSEArca: IBND) gained nearly 5% last year. S&P Capital IQ rates the $281.7 million IBND marketweight.
IBND has a 30-day SEC yield of 1.2% and a modified adjusted duration of 4.92 years, according to State Street data. Approximately three-quarters of IBND’s holdings are rated AAA, AA or A. Bonds from issuers in the U.S., France, Germany and the U.K. combine for over 57% of IBND’s weight.
“Year to date, LQD and IBND rose 2.5% and 2.5%, respectively, ahead of the 2.0% gain for the widely referenced Barclays U.S. Aggregate Bond Index. We think an improving credit outlook bodes well, though as with any bond offering, the direction of interest rates will also be a factor,” according to S&P Capital IQ.
SPDR Barclays Capital International Corporate Bond ETF
Tom Lydon’s clients own shares of LQD.