On big down days like today, one of the things we like to do is to screen for securities that are moving up while most other assets are declining.
While stocks were down 4% and bonds, oil and gold were also in the red, the SPDR Barclays Capital International Treasury Bond ETF (BWX) was up about 0.5% today. The $1.0 billion ETF tracks fixed-rate local currency sovereign debt of investment-grade countries outside the United States.
As you might guess, BWX has been hurt by the European debt crisis, declining over 7% year to date. However, today’s move likely indicates a flight to safety as investors choose government debt over volatile equities and commodities.
About 30% of the BWX portfolio is invested in Japanese and German treasuries. The fund carries an expense ratio of 0.5% and has a 30 day SEC yield of 2.37%.