International Bond ETFs might be your solution for diversifying your portfolio, gaining exposure to emerging markets, or even hedging your foreign risk. If you are looking for an investment to control interest rate risk or create a monthly revenue stream, look no further than international bond ETFs.
1. Invest in Foreign Markets
Do you want global exposure in your portfolio? Using a foreign bond ETF can help your investing strategy gain access to emerging markets or even stable regions. You can even use an international bond ETF to hedge foreign risk in areas that have market-threatening developments. And while foreign ETFs can be used in a similar strategy, the added benefit of a bond ETF is the revenue stream it creates on a monthly basis.
2. Diversify Your Portfolio
Diversification is the key to decreasing risk. A well-diversified portfolio will help make sure your profits remain steady and your losses remain minimal. Turmoil in a market sector may hurt a portion of your portfolio, but not the diversified portfolio overall. So while you can diversify with market ETFs and industry ETFs, you can diversify with international bond ETFs just as well. The more weapons you have in your investment arsenal, the better. International bond ETFs are another tool for your utility belt.
3. Control Interest Rate Sensitivity
Bond investments have a correlation to interest rates. Bond ETFs are no exception. So, if you want to play the interest rate market without the complications of bond investments, bond ETFs might be a fit for you. So, it only makes sense to consider international bond ETFs if you are looking for foreign interest rate exposure. And of course if you are looking to hedge interest rate exposure either in the U.S. or foreign regions, foreign currency ETFs and international bond ETFs can work to those means.4. Hedge Risk
In all of the above instances, we look at methods to gain exposure to certain markets using international bond ETFs. However, you can also see how they can be used to hedge risk. Whether it’s hedging foreign risk, controlling interest rate risk, or decreasing the overall risk of your portfolio, international bond ETFs can help you accomplish your investing goals.
As you can see, international bond ETFs can work for your portfolio in a lot of different ways, so it might be time to get started with ETFs and reap the benefits. However, before you delve into international bond ETFs it is important to track a few and see how they react to different market conditions. Here are two international bond ETFs among many to keep an eye on.
If you'd like to see more of these funds, see our List of International Bond ETFs
If you want to learn about other bond ETFs, read all about the 14 Types of Bond ETFs or see our List of Bond ETFs.
If you think you are ready for international bond ETFs, but don’t have a broker, here are some reviews for online brokers that may help you with the process.
