How Much Foreign-Bond Exposure Do Retirees Need?
Currency fluctuations add an extra layer of volatility.
Bond investors have been busily globalizing their portfolios, according to recent Morningstar asset flows data. World-bond funds picked up $9.6 billion in new assets in 2012, and emerging-markets bond funds saw asset inflows more than twice that high.
Those robust flows beg the question of how big a role foreign bonds and bond funds should play in a portfolio, particularly for pre-retirees and retirees who are steering ever-larger sums to fixed-income securities.
Christine Benz does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.