Similar to US versus International Equities, US bonds have very low correlations with many non-US bonds. Therefore, non-US bonds offer tremendous diversification benefits to savvy US investors.
The international corporate bond markets are not as well established or liquid as the United States bond markets. Therefore, most international bond investing is accomplished by purchasing foreign Government bonds, a much more liquid market than the market for non-US corporate bonds.
HerTip: When evaluating an international or global bond manager, investors should scrutinize the currency policy of the manager and assess the level of risk that the manager is willing to undertake.
Continue to: Part IV: International Challenges
Characterizing the Global Markets