Global government bond fund?

Barry_Bear

Anyone know of a fund or ETF that is all the following?
1. Low cost index/passive not active
2. Global government bonds not just gilts or US Ts (at least 90% government bonds, i.e. not a high allocation of corporate bonds).
3. Hedged to GBP
4. Medium Effective Duration (approx. 7 years)
5. Accumulation not income/distributing
Closest I can find is iShares Global Govt Bond UCITS ETF GBP Hedged (IGLH) but this is income not acc. and haven't found an acc. equivalent.

MX5huggy

Vanguard Global bond index fund, but too much corporate? 

https://www.vanguardinvestor.co.uk/investments/vanguard-global-bond-index-fund-gbp-hedged-acc/overview?intcmpgn=fixedincomeglobal_globalbondindexfund_fund_link

Barry_Bear

Yes too much corporate. Looking for Govt bonds.

kuratowski

How about ASI Global Government Bond Tracker Fund B GBP Acc

https://www.youinvest.co.uk/market-research/FUND:BK80KQ7

quirkydeptless

VAGS to Viches?

https://www.hl.co.uk/shares/shares-search-results/v/vanguard-global-aggreg-bond-ucits-etf-h-acc

masonic

quirkydeptless said:

VAGS to Viches?

This one also includes investment grade corporate bonds. It's essentially the ETF version of the fund discussed earlier in the thread.

Barry_Bear

Thanks. Yes too many corporate bonds. 
The ASI ticks all the boxes, although it's quite new so not much track record and the benchmark has a longer duration than I'd prefer (I've edited the OP to add this criteria which I forgot to include). The fund also has no data yet for duration or average credit quality which makes it hard to judge.

underground99

Barry_Bear said:

The ASI ticks all the boxes, although it's quite new so not much track record and the benchmark has a longer duration than I'd prefer (I've edited the OP to add this criteria which I forgot to include). .

If you are only wanting to allocate your money in a non-active way into the index proportions of what's available in the market, you are probably going to have to make compromises on your demands - such as what duration you end up with when you invest passively and globally into a specific asset class.

If you had the money to pay them, I'm sure JP Morgan could construct some sort of index of global government bonds with the exact duration that you prefer, by eliminating a whole load of bonds whose presence in their regular global index is currently dragging the weighted average duration away from your preference in one direction or the other. But it's not 'passive' to invent a whole new index that doesn't follow market allocations and then build an investible product around it and find enough client money to make it viable to launch.

The fund also has no data yet for duration or average credit quality which makes it hard to judge

Presumably, Aberdeen Standard are going to try to deliver the performance that they intend to deliver by tracking the index that they say they are trying to track. So there perhaps isn't a problem reviewing the duration and credit quality of the fund itself, as you can review the duration and credit quality of the index that is built to track, and see if you like it.

Though I suppose as it's a relatively small fund, compared to some bond trackers, they may do a worse job at tracking the index than (or end up not having as long a life as),  a bigger fund that can operate more efficiently.

Barry_Bear

"Though I suppose as it's a relatively small fund, compared to some bond trackers, they may do a worse job at tracking the index than (or end up not having as long a life as),  a bigger fund that can operate more efficiently."

Yes my concern too.
I've been reluctant to hold bonds but now accepting that perhaps it's time to reduce equities a little. But if I must hold bonds I want good AAA/AA global (not all eggs in one basket of just gilts or USTs), government not corporate, and not highly exposed to interest rates or inflation (not long duration), and hedged to GBP to remove currency risk. Getting all that looks unlikely. 
iShares Global Govt Bond UCITS ETF GBP Hedged (IGLH) comes closest, ticks all these boxes. But it's income and I wanted accumulation, but looks like there isn't a good accumulation choice on the market.

quirkydeptless

Barry_Bear said:

Closest I can find is iShares Global Govt Bond UCITS ETF GBP Hedged (IGLH) but this is income not acc. and haven't found an acc. equivalent.

I have IGLH, and I just set it to auto-reinvest on my platform (Hargreaves Lansdown), so an ACC version of it would be nice to save a bit on transaction costs. However, as I approach retirement, the option to switch off the auto-invest and get a bit of income flow is then available to me. 

masonic

Barry_Bear said:

iShares Global Govt Bond UCITS ETF GBP Hedged (IGLH) comes closest, ticks all these boxes. But it's income and I wanted accumulation, but looks like there isn't a good accumulation choice on the market.

Accumulation ETFs are still very much in the minority. There does seem to be an issue offering an accumulating ETF hedged to a currency other than the base currency of the fund (you can get a USD Hedged Acc version). If you plan to make ongoing contributions to your account, then sweeping up income into an already planned trade will be almost as good. As this is not a high growth investment, you won't be missing out on compound interest to any appreciable extent.

I prefer distributing funds, as the income trail is clear and I can choose to reinvest income in any of my holdings, not just the one that paid it out.