Some time ago when I was in graduate school I had a class entitled “Global Portfolio Management”. Aside from doing rigorous things like calculating beta and portfolio standard deviation BY HAND, there were a few interesting and salient points that stuck with me. One of those happened to concern the relationship of price movements between two classes of stocks; 1) all of the stocks within a given country but in separate industries and 2) all of the stocks within a given industry but in separate countries.

Now, I cannot find the original academic work that my professor relied upon to demonstrate this point but the conclusion of the work went something like this (paraphrasing):

Important note from Seeking Alpha editors: State Street has informed us that the key premise of this article, that 70% of the SPDR Lehman International Treasury Bond ETF is comprised of three Mexican Fixed Rate Bond issues, is incorrect. As one of the comments below the article points out, problems with State Street's web site have resulted in confusion about the fund's holdings. An updated and corrected page showing the fund's holdings is now available.

Many of my fellow advisors seem to be enamored with the idea of investing in foreign treasury bonds via the relatively new (October 2007) ETF from State Street (BWX). This fascination has been exacerbated by the recent rapid decline in U.S. equity markets and the coinciding increase in bond values.