Just a few years ago there were only a handful of bond ETFs available to U.S. investors, and almost all of them focused on securities from U.S. issuers denominated in U.S. dollars. One of the most noteworthy innovations to shape the ETF industry over the last several years has been a significant growth in international bond products; as issuers have worked around concentration-related issues and other hurdles, the universe of bond ETPs targeting markets beyond U.S. borders has grown tremendously.
With dozens of international bond ETPs now on the market, investors have the flexibility to tap into all corners of the fixed income universe. Below, we highlight all of the international bond ETF options.
Emerging Markets Bonds (Local and Dollar-Denominated)
There are a handful of ETFs that offer exposure to debt of emerging markets issuers that is denominated in U.S. dollars. Because the underlying bonds are issued in the currency of the U.S., the exchange rate impact is stripped out; fluctuations in the value of emerging market currencies relative to the U.S. dollar don’t impact returns to U.S.-based investors. Conversely, there are also several local currency-denominated funds that offer exposure to emerging market debt.
| Ticker | Name | Currency Exposure |
|---|---|---|
| (EMB ) | iShares JPMorgan USD Emerging Markets Bond Fund | U.S. Dollar Denominated |
| (PCY ) | PowerShares Emerging Markets Sovereign Debt Portfolio | U.S. Dollar Denominated |
| (EMLC ) | Market Vectors Emerging Markets Local Currency Bond ETF | Local Currency |
| (ELD ) | WisdomTree Emerging Markets Local Debt Fund | Local Currency |
| (LEMB ) | iShares Emerging Markets Local Currency Bond ETF | Local Currency |
| (DSUM ) | PowerShares Chinese Yuan Dim Sum Bond Portfolio | Local Currency |
| (EBND ) | SPDR Barclays Capital Emerging Markets Local Bond ETF | Local Currency |
| (EMCB ) | WisdomTree Emerging Markets Corporate Bond | U.S. Dollar Denominated |
| (CHNB ) | Global X GF China Bond ETF | Local Currency |
| (KCNY ) | Kraneshares E Fund China Commercial Paper ETF | Local Currency |
| (CEMB ) | iShares Emerging Markets Corporate Bond ETF | U.S. Dollar Denominated |
| (EMCD ) | SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF | U.S. Dollar Denominated |
| (CBON ) | Market Vectors ChinaAMC China Bond Etf | Local Currency |
| (EMAG ) | Market Vectors Emerging Markets Aggregate Bond ETF | U.S. and Local Currency |
| (EMIH ) | Emerging Markets Bond - Interest Rate Hedged ETF | U.S. Dollar Denominated |
| (CHLC ) | Market Vectors Renminbi Bond ETF | Local Currency |
| (FEMB ) | First Trust Emerging Markets Local Currency Bond ETF | Local Currency |
| (PFEM ) | PowerShares Fundamental Emerging Markets Local Debt Portfolio | Local Currency |
| (LEMF ) | EGShares TCW EM Long Term Investment Grade Bond ETF | U.S. Dollar Denominated |
| (IEMF ) | EGShares TCW EM Intermediate Term Investment Grade Bond ETF | U.S. Dollar Denominated |
| (SEMF ) | EGShares TCW EM Short Term Investment Grade Bond ETF | U.S. Dollar Denominated |
| (VWOB ) | Vanguard Emerging Markets Government Bond ETF | U.S. Dollar Denominated |
Asia Pacific (Developed and Emerging)
There are a number of ETFs offering exposure to debt issued by emerging and developed economies in the Asia Pacific region, including some inverse and leveraged options.
| Ticker | ETF | Region | Region Specific |
|---|---|---|---|
| (ALD ) | Asia Local Debt Fund | Broad Asia | Pacific ex-Japan |
| (AUNZ ) | Australia & New Zealand Debt Fund | Developed Asia Pacific | Australia |
| (CBON ) | ChinaAMC China Bond ETF | Emerging Asia Pacific | China |
| (CHLC ) | Market Vectors Renminbi Bond ETF | Emerging Asia Pacific | China |
| (CHNB ) | GF China Bond ETF | Emerging Asia Pacific | China |
| (DSUM ) | Chinese Yuan Dim Sum Bond Portfolio | Emerging Asia Pacific | China |
| (JGBD ) | DB 3x Inverse Japanese Government Bond Futures ETN | Developed Asia Pacific | Japan |
| (JGBL ) | DB Japanese Government Bond Futures ETN | Developed Asia Pacific | Japan |
| (JGBS ) | DB Inverse Japanese Government Bond Futures ETN | Developed Asia Pacific | Japan |
| (JGBT ) | DB 3x Japanese Government Bond Futures ETN | Developed Asia Pacific | Japan |
| (KCNY ) | E Fund China Commercial Paper ETF | Emerging Asia Pacific | China |
Developed Europe
For investors looking to gain access to debt of European issuers, there are several broad and country-specific options. Some of these funds also offer leveraged and inverse exposure:
| Ticker | ETF | Region Specific |
|---|---|---|
| (BUNL ) | DB German Bund Futures ETN | Germany |
| (BUNT ) | 3x German Bund Futures ETN | Germany |
| (EU ) | Euro Debt Fund | Developed Europe Broad |
| (GGOV ) | German Sovereign/Sub-Sovereign ETF | Germany |
| (ITLT ) | DB 3x Italian Treasury Bond Futures ETN | Italy |
| (ITLY ) | DB Italian Treasury Bond Futures ETN | Italy |
Global and Global ex-U.S.
The bond ETF lineup consists of a number of products that cast a wide net, holding debt securities from issuers around the globe. The following ETFs hold debt of several different countries, including both developed and emerging markets. The table identifies which options include or exclude U.S. fixed income:
| Ticker | ETF | Region |
|---|---|---|
| (BNDX ) | Total International Bond ETF | Global ex-U.S. |
| (BWX ) | SPDR Barclays Intl Treasury Bond | Global ex-U.S. |
| (BWZ ) | SPDR Barclays Capital Short Term International Treasury Bond ETF | Global ex-U.S. |
| (CRDT ) | Strategic Corporate Bond Fund | Global |
| (FCOR ) | Corporate Bond ETF | Global |
| (FWDB ) | Madrona Forward Global Bond ETF | Global |
| (GTIP ) | iShares Global Inflation-Linked Bond ETF | Global |
| (HYXU ) | Global ex USD High Yield Corporate Bond Fund | Global ex-U.S. |
| (IBDA ) | iSharesBond 2016 Corporate Term ETF | Global |
| (IBDB ) | iShares 2018 Corporate Term ETF | Global |
| (IBDC ) | iSharesBond 2020 Corporate Term ETF | Global |
| (IBDD ) | iBonds Mar 2023 Corporate ETF | Global |
| (IBND ) | SPDR Barclays Capital International Corporate Bond ETF | Global ex-U.S. |
| (IGOV ) | S&P/Citigroup International Treasury Fund | Global ex-U.S. |
| (IHY ) | Market Vectors International High Yield Bond ETF | Global ex-U.S. |
| (IJNK ) | SPDR Barclays International High Yield Bond ETF | Global ex-U.S. |
| (ILB ) | Global Advantage Inflation-Linked Bond Strategy Fund | Global ex-U.S. |
| (ISHG ) | S&P/Citi 1-3 Yr Intl Treasury Bd | Global ex-U.S. |
| (ITIP ) | iShares International Inflation-Linked Bond ETF | Global ex-U.S. |
| (PGHY ) | PowerShares Global Short Term High Yield Bond Portfolio | Global |
| (PICB ) | International Corporate Bond Portfolio | Global ex-U.S. |
| (RAVI ) | Ready Access Variable Income Fund | Global |
| (RIGS ) | RiverFront Strategic Income Fund | Global |
| (SUBD ) | Solactive Investment Grade Subordinated Debt Fund | Global |
| (WIP ) | SPDR DB International Government Inflation-Protected Bond ETF | Global ex-U.S. |
The Bottom Line
These international bond ETFs are great options for investors looking to diversify their fixed income holdings. In addition, many of these funds can help target specific corners of the market, including regions, countries, and emerging or developed market exposure. Be sure to utilize the ETFdb Screener to help narrow down international exposure.
Disclosure: No positions at time of writing.
