Our local currency, the CRC, is tightly linked to the USD.
Our bonds = BND.
I'm wondering if we should use BNDW instead?
BNDW: SEC Yield = 1.78%. 12 mo yield = 2.88%.
BND: SEC Yield = 1.19%. 12 mo yield = 2.50%.
BNDW has higher yields vs BND. See OP.
It looks like Mr Market wants to PAY US to diversify into non-USD bonds.
Our "BND" consists of 2 ETFs.
BNDW's duration = 7.3 yr. Credit = A.
BND's duration = 6.5 yr. Credit = AA.
Our "BND" consists of 2 ETFs. Our "BNDW" would be only 1 ETF.
A simplification bonus in addition to being paid to eat a free lunch of diversification.
We've decided to go with UNHEDGED WB (AGGG) instead of USD HEDGED WB (AGUG).
We'll do this in early October.
This article supports the unhedged version.