Int'l Bond ETF - Brewer ??

[joesxm3]

I am hoping to hear from Brewer on this, but others are welcome to comment as well.

I am looking to add some non-correlated asset classes and came across the BWX International Bond ETF and the PCY Emerging Markets Soverign Bond ETF.

I currently have the Fidelity FBIDX and FTBFX which seem to have a very small international bond exposure.

I saw previous recommendations for GIM.

My macro allocation is 60% equity / 40% bond funds + I Bonds + CD + MM. Within equity I have about 35% foreign (5% china, 5% asia ex-china, 5% latin america, 2% africa). It seems that africa equity is also non-correlated.

I am thinking to get up to 10% total (or 25% of bonds) into some foreign bond funds, with 1-2% total into EM bonds.

Is BWX ok? What is the current thinking on GIM?

Are there any similar new Vanguard ETF offerings? Since I am with FIDO I prefer Vanguard ETF's to avoid the FIDO fee.

My preference would be high quality foreign (e.g. government), index or no load funds or ETFs, without currency hedging.

Thanks.

 

[brewer12345]

I haven't looked at the new ETFs yet, so I can't comment. I will try to look today, but my office is moving in the middle of a market "event" so I don't know if I will get to it today.

I still think GIM is an excellent choice, but only when you can buy it at a discount to NAV. Currently trading at a premium and has been for a while.

BEGBX is my other choice, but I may toss it in favor of the ETFs if I can get comfy with them.

I would stick to higher grade sovereigns. 10% of the port sounds about right for a 60/40 port.

African equity? What are there, two of them?

 

[bpp3]

My preference would be high quality foreign (e.g. government), index or no load funds or ETFs, without currency hedging.

BWX would fit the bill, if you don't mind the expense ratio. 0.5% seems
a bit high to me for bonds, though it is still the cheapest out there as far as I know.

 

[IndependentlyPoor]

I just sold our entire BWX (international bond ETF) position. It was 5% of our portfolio. I didn't want to do it, but they haven't paid a dividend in four months and I can't abide that any longer. Their stated reason for the suspension seems ridiculous: currency fluctuations. My broker called around and reported that they are having to "absorb write-downs" before dividends resume. That is really creepy. They are under new management and playing games with dividends is just too much for me.

So no more international bonds in our portfolio. Will have to figure out what to do with that chunk now.

Oh well. We made a little money on it.

 

[audreyh1]

I still think GIM is an excellent choice, but only when you can buy it at a discount to NAV. Currently trading at a premium and has been for a while.

I've been looking at GIM, but I have never bought a CEF before. What is a reasonable discount to NAV to wait for?

Thanks!

Audrey

 

[brewer12345]

For GIM, a 5% discount would be attractive based on its history.

FWIW, I booted BEGBX a little while ago when the manager if the fund was abruptly changed with little reason given. I will re-evaluate after some time, but in the meantime GIM is my chosen vehicle when it is at NAV or less.