How Much Foreign-Bond Exposure Do Retirees Need?
Currency fluctuations add an extra layer of volatility.
Investors have been steering large sums of money to noncore bond types in recent years, including world-bond and emerging-markets bond funds. The former category has taken in $15 billion in new assets during the past year, according to Morningstar's most recent asset-flows data, and the latter has raked in even more, $21 billion.
That strong appetite for foreign bonds has me wondering 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.