Bond ETFs are in demand in 2025. With less than a third of the year complete, the industry has gathered $110 billion of net inflows. While ETFs focused on U.S. government bonds have been in vogue, their strong performing international cousins have not. This is a shame because many ETFs owning international bonds are performing great in 2025.
Outstanding Bond ETFs
The SPDR Bloomberg International Corporate Bond ETF (IBND ) is a $217 million ETF that was up 12% year-to-date through April 22. The fund’s relatively small asset base is not due to its youth. IBND will be celebrating its 15 year anniversary next month. IBND’s double digit gain is significantly higher than the 1.4% for the SPDR Portfolio Intermediate Corporate Bond ETF (SPIB ).
While SPIB is focused on US corporate bonds, IBND has high exposure to bonds issued by companies domiciled in France, Germany, and the U.K. Despite its strong returns this year, IBND has $2.5 million of net outflows.
The iShares 1-3 Year International Treasury Bond ETF (ISHG ) was up 11% for the year. Despite its success and more than a 15 year record, ISHG manages just $155 million in assets. This base has doubled in 2025 but net inflows of $80 million is still modest. An iShares cousin, the iShares 1-3 Year Treasury Bond ETF (SHY ), pulled in $1.3 billion. SHY manages $24 billion in assets and was up just 1.9% thus far in 2005.
ISHG owns sovereign bonds from Italy (9.5% of assets), France, (9.5%), Japan (9.1%), and Germany (8.4%). Investors might want to pair ISHG with SHY to further diversify their short-term exposure.
iShares has another strong performing international bond ETF that remains under the radar. The iShares International High Yield Bond ETF (HYXU ) has $5 million of net outflows this year and has just $2 million in assets. This is unfortunate because the high yield ETF was also up 11% in 2025.
HYXU’s strong performance is in contrast to the 0.4% loss for the iShares Broad USD High Yield Corporate Bond ETF (USHY ). USHY is a $20 billion ETF with more than $1.2 billion of net inflows in 2025. HYXU’s assets are spread across Europe with France (17%), Italy (16%)) and the U.K. (13%) well represented.
We believe many advisors and investors have dedicated exposure to international equities via ETFs. However, their fixed income allocations remain concentrated in the U.S. despite the weakness in the US dollar. If the relative performance between international and U.S. fixed income ETFs persists perhaps this will shift. Otherwise they will be missing out on some compelling, well-diversified fixed income ETFs.
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