“Nevertheless, structural stagnation denies them both the opportunity to declare victory because the easing has failed to feed through to household incomes. Meanwhile, ECB’s delay in initiating aggressive easing to last month makes it nearly impossible for it to stave off deflation,” notes S&P Capital IQ. “As for eurozone bond exposures, a prolonged period of forceful monetary relaxation would provide investors a barbelling opportunity of lengthening duration of investment grade government bond holdings as they shorten the same in the US and UK.”
The SPDR Barclays International High Yield Bond ETF (NYSE: IJNK), which debuted in March, is an option for investors looking to maintain high-yield debt exposure while trimming duration. IJNK has a modified adjusted duration of 3.97 years compared to 4.44 years on its U.S.-focused counterpart, the SPDR Barclays High Yield Bond ETF (NYSEArca: JNK).
Rated marketweight by S&P Capital IQ, the $33.4 million IJNK features a 30-day SEC yield of 4.38, or 125 basis points below the comparable yield on JNK. [ETF Second Acts to See]
IJNK’s average yield to worst is 4.94%. Nearly 29% of the ETF’s combined weight goes to Italian and British issues with another 19% going to French and German junk bonds.
SPDR International High Yield Bond ETF
Tom Lydon’s clients own shares of JNK.