An ETF Bonding Experience

Foreign Bond Introduction?

I would note that the biggest development with the announcement of these ETFs might have come in Gregg Greenberg's interview with iShares head of U.S. product development Noel Archard, in which it was disclosed that foreign-bond ETFs are on their radar.

Foreign-bond indices have already been created by MSCI Barra for the sovereign debt of 24 countries, as well as four regional indices. I don't know whether iShares would use any of these indices or not, but that they exist makes creating ETFs a little easier.

The reason I am so interested in the potential for foreign-bond ETFs is that even for $1 million bond portfolios, accessing foreign bonds is very difficult to do. While there are plenty of traditional mutual funds that own foreign bonds, they tend to be actively managed, and I prefer the chance to select countries and regions on my own and weight them as I see fit. The foreign-bond ETFs will have the same flaws, but they could be the best tool nonetheless.