International bonds represent the broad market for high-quality bonds outside of the United States. They may invest in both developed and emerging markets, but tend to invest primarily in highly rated treasury debt.
Bond rating firms classify the ability of a company to pay back its debt using letter grades. International bond funds typically focus on debt in the AAA (the highest rating) to BBB (for medium credit quality) range. These bonds are considered very trustworthy and unlikely to default on their debt.
International bonds can be purchased in many different maturities, but the funds on this site focus on intermediate bonds with an average maturity of about 5-10 years.
- 1970-1975: Longinvest’s bonds fund spreadsheet (10-2 model), R*
- 1976-1984: Bloomberg Barclays US Aggregate Bond TR USD, R*
- 1985-1989: Citigroup WGBI NonUSD Hedged USD, P
- 1990-2013: Bloomberg Barclays Global Aggregate Ex USD TR Hdg USD, P
- 2013+: Vanguard Total International Bond Index Fund (VTIBX), P
(*) Good International Bonds data is not available prior to 1985. In previous years, I use two different replacement assets. The first priority is the US Total Bond Market, and the second priority is an intermediate treasury model. While neither directly model international bonds, the error is surprisingly low and moderate amounts of I-BND will work fine in the calculators.
Portfolios with International Bond assets