BNDX offers broad market-like exposure to investment-grade bonds denominated in foreign currencies, hedged against currency fluctuations for US investors. A majority of the fund`s investments are in sovereign bonds with AA rating or better. BNDX`s basket roughly resembles our segment benchmark, though returns differ due to the ETF`s currency hedge and to differing mixes of sovereign and local authority bonds. The fund limits the impact of non-U.S. currency fluctuations on performance through the use of non-deliverable forward contracts. Transparency remains a concern, as Vanguard only publishes holdings on a monthly basis. Still, BNDX comes at a low cost, and is the largest and most liquid fund in its segment (newer entrants from iShares and State Street track a very similar index).
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