Another income-generating ETF favored by the strategy is the Vanguard Total International Bond ETF (NYSEArca: BNDX). BNDX debuted last year and has quietly become a $2.8 billion ETF, a rise helped in part by the fact that it is the premier currency hedged bond ETF.

BNDX ries to reflect the performance of the Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index, which includes government, agency, corporate and securitized non-U.S. investment-grade fixed income investments issued in foreign currencies but also includes a hedge to its currency exposure. [Spotlight on Global Hedged Bond ETF]

Home to 3,100 bonds, BNDX has an all-investment grade lineup and an average duration of 7.1 years. BNDX charges just 0.2% per year, making it less expensive than 81% of comparable funds, according to Vanguard.

Vanguard REIT ETF