BGI Launches Two Fixed-Income ETFs

BGI Launches Two Fixed-Income ETFs...

Barclays Global Investors made its first launches of 2009 last Friday, with the rollout of two international Treasury exchange-traded funds on the NASDAQ.

The iShares S&P/Citigroup International Treasury Bond Fund (NasdaqGM: IGOV) and the iShares S&P/Citigroup 1-3 Year International Treasury Bond Fund (NasdaqGM: ISHG) are both based on indexes tracking Treasury bonds that are issued in local currencies by developed markets other than the U.S., although ISHG is limited to bonds with maturities between one and three years.

The 19 countries represented in the indexes are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Both new iShares international bond funds are expected to wind up charging 0.35% annually in expense ratios.

You can view the prospectus for the ISHG here and for IGOV here.

... And So Does State Street

On Tuesday, State Street Global Advisors launched the SPDR Barclays Capital Short Term International Treasury Bond ETF (NYSEArca: BWZ) and the SPDR Barclays Capital Mortgage Backed Bond ETF (NYSEArca: MBG).

BWZ targets international investment-grade debt issued in local currencies with maturities of one to three years. In addition to developed markets, the underlying index includes issues from countries like South Korea, Poland, Hungary and South Africa. Japan, Germany and Italy, however, are the top three countries represented in the index. As of Jan. 27, BWZ had 18 different holdings.

The fund is very similar to the iShares S&P/Citigroup 1-3 Year International Treasury Bond Fund (NasdaqGM: ISHG), except it includes emerging market debt, whereas ISHG has only developed market holdings.

BWZ charges 0.35% in annual expenses, the same as ISHG.

MBG, the other ETF rolled out on Tuesday, tracks the Barclays Capital U.S. MBS Index, which covers investment-grade, U.S. agency mortgage-backed securities. MBG's benchmark tracks 1,700 components, but its portfolio holds 14 components. It charges 0.20% in annual expenses.