A few observations about this comparison:
- The hedged non-U.S. Aggregate has outperformed the unhedged version by nearly 1.6 percentage points this year due to the weakness of the euro, particularly over the past four months.
- The unhedged non-U.S. index has performed similarly to the U.S. Aggregate, but with greater volatility due to currency fluctuations.
- The hedged non-U.S. has outperformed the U.S. Aggregate by nearly 1.4 percentage points year-to-date, with the outperformance coming in the past three months.
Conclusion
As with building a diversified equity portfolio, there are numerous decisions that need to be made when building out a diversified fixed-income portfolio.
While the suite of non-U.S. ETFs is not as robust as on the U.S. side, there are numerous differentiated funds available to use in building a diversified fixed-income portfolio.
Founded in 1993, Stadion Money Management is a privately owned money management firm based near Athens, Georgia. Via its unique approach and suite of nontraditional strategies with a defensive bias, Stadion seeks to help investors—through advisors or retirement plans—protect and grow their “serious money.” Contact Stadion at 800-222-636 or www.stadionmoney.com. References to specific securities or market indexes are not intended as specific investment advice.
