Foreign Bond
A bond that is issued in a domestic market by a foreign entity, in the domestic market's currency.
Investopedia Commentary
Foreign bonds are regulated by the domestic market authorities and are usually given nicknames that refer to the domestic market in which they are being offered.
Since investors in foreign bonds are usually the residents of the domestic country, investors find them attractive because they can add foreign content to their portfolios without the added exchange rate exposure.
Types of foreign bonds include bulldog bonds, matilda bonds, and samurai bonds.
Related Links
Bond Basics Tutorial
Investing Beyond Your Borders
See also: Bulldog Bond, Eurobond, Global Bond, International Bond, Matador Bond, Matilda Bond, Samurai Bond, Yankee Bond
foreign bond
Is it risky to invest in foreign securities? Investing in foreign securities can actually reduce your overall portfolio risk and at the same time modestly increase the potential for returns. The U.S. stock market still remains the largest in the world; however, foreign markets now account for approximately 50% of the global stock market capitalization. Consequently, it is becoming more important to diversify portfolios globally, taking advantage of growth rates in different regions and countries. Proper international diversification can help balance out your returns by reducing or avoiding losses when the U.S. markets are underperforming.Thomas M. Tarnowski, Senior Business Analyst, Global Investment Banking Division, Citigroup, Inc. |
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