Investors can also look toward the upper end of the yield curve with long-term Treasury bond ETFs. For example, the iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) has a 17.72 year duration and a 2.44% 30-day SEC yield. The PIMCO 25+ Year Zero Coupon US Treasury (NYSEArca: ZROZ) has a 27.34 year duration and a 2.56% 30-day SEC yield. The Vanguard Extended Duration Treasury ETF (NYSEArca: EDV) has a 24.8 year duration and a 2.57% 30-day SEC yield.
Japanese investors first started with U.S. Treasuries and investment-grade debt as their own yields plummeted. Now, they have targeted European notes as well, Miller said. The rising demand for international bonds has helped increase interest for fixed-income ETFs.
“Fixed-income ETFs now allow global investors a ready, efficient way to access that market very quickly, without having to go out and purchase individual bonds,” Stephen Laipply, an ETF strategist and managing director at BlackRock, told Bloomberg.
ETF investors can also gain exposure to the strengthening global debt market through international Treasury bond ETFs, including the SPDR Barclays International Treasury Bond ETF (NYSEArca: BWX) and the iShares International Treasury Bond ETF (NYSEArca: IGOV).
IGOV includes a hefty 22.6% tilt toward Japan, along with many Eurozone states like France 6.7%, Italy 6.5%, Germany 4.9%, U.K. 4.8%, Ireland 4.7% and Portugal 4.7%, among others. The ETF has a 7.89 year duration and a 0.26% 30-day SEC yield.
BWX also holds Japan 22.9%, U.K. 7.9%, Italy 6.9%, Francey 6.8%, Netherlands 4.7% and Belgium 4.7% among its top country components. The fund has a 8.20 year duration and a 0.54% 30-day SEC yield.
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