Barclays Global Investors made its first launches of 2009 on Friday with the rollout of two international Treasury exchange-traded funds on the NASDAQ.

The iShares S&P/Citigroup International Treasury Bond Fund (NasdaqGM: IGOV) and the iShares S&P/Citigroup 1-3 Year International Treasury Bond Fund (NasdaqGM: ISHG) are both based on indexes tracking Treasury bonds that are issued in local currencies by developed markets other than the U.S., although ISHG is limited to bonds with maturities between one and three years.

The 19 countries represented in the indexes are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Both new iShares international bond funds are expected to wind up charging 0.35% annually in expense ratios.  

Their primary competitor appears to be the SPDR Barclays Capital International Treasury Bond ETF (NYSEArca: BWX), which currently has about $906 million in assets.

Launched in October 2007, BWX's annual expense ratio is 50 basis points. However, a key difference between BWX and the new iShares is the SPDR ETF's inclusion of emerging markets such as Poland and Mexico.

BWX's underlying index also does not exclude the United States, which carries a weight of 4.57% in the fund.

All together, 18 countries are represented in the index.

Matthew Tucker, head of U.S. fixed income investment strategy at BGI, says that investors have traditionally found non-U.S. fixed-income exposure difficult and expensive to access.

The new iShares are certainly cheaper than the existing SPDR fund, but it may be their different country mix that turns out to be their main selling point.