Standard & Poor's launches international Treasury bond index series

By Devika Patel

Knoxville, Tenn., Nov. 3 - Standard & Poor's announced the launch of the S&P/Citigroup International Treasury Bond index series.

The series is the latest in an expansion of S&P's fixed-income index capabilities, following the launches of the S&P US Commercial Paper index and the S&P/LSTA U.S. Leveraged Loan 100 index.

The new series is designed to be a benchmark representing developed-market Treasury bonds excluding the United States.

The indexes include only countries that are classified as being developed markets by the Bank of International Settlements.

The new series consists of two indexes: the S&P/Citigroup International Treasury Bond Index Ex-US, which includes bonds with a maturity of greater than one year, and the S&P/Citigroup International Treasury Bond Index Ex-US 1-3 Year, which includes bonds with a maturity of between one and three years.

The indexes are rebalanced at the end of each month. On a back-tested basis, the yields of the indexes have generally been between 2% and 4% since April 2001.

"Treasury bonds issued by sovereign nations excluding the United States are an asset class that is often overlooked by investors," S&P Index Services vice president James Rieger said in a press release. "They have returns with low correlations with US stocks and bonds as well as international stocks. The new indices are designed to provide investors with more transparency about the performance of this asset class. Risk factors include default risk, liquidity risk, interest rate risk and currency risk."

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