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Int'l and/or emerging market bonds

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  • Int'l and/or emerging market bonds

    Re-allocating with some inherited tax-deferred IRAs and thought about international bonds, emerging market gov't/corp bonds in particular. Just wondering who holds these and how they utilize them in their portfolio, and what funds they use. I just think it's pretty interesting to have bonds from the Russian Ministry of Finance. A lot are investment-grade, very credit- and interest-rate sensitive; seems rather speculative.

    If so, I'm sure everyone's probably in VTABX/BNDX and VGAVX/VWOB...

  • #2
    I'm of the mindset to take your risk on the equity side and not the bond side and do not have plans for investing in Int'l or EM bonds. Maybe just up your Int'l/EM equity exposure instead?


    • #3
      I do have some international bonds from Vanguard.  VTABX.  No emerging market bonds.


      • #4
        WCICON24 EarlyBird
        I hold some VTABX in a taxable account where I don't take as much risk, relative to a taxable or tax deferred account.  Overall, I would say VTABX comprises about 10% of my overall bond portfolio.

        The idea of holding VTABX is bond diversification relative to the overall bond portfolio.  The 'idea' as diversification is not as strong an argument as it has been in the past, but that can change relatively quickly.  With 'international' slightly differing risks are present, including currency, country, sovereign/credit.  Also, fund costs for a bond fund are a bit higher.

        In your situation, as the account is inherited and tax deferred, I would look to take greater risk in this type of account (i.e. equities), unless there is a specific reason/need or limitation not articulated.