Foreign bond funds

[bongo2]

I notice that Vaguard doesn't have a foriegn bond fund. Has anyone found a good, low cost, one?

 

[sgeeeee]

I notice that Vaguard doesn't have a foriegn bond fund.  Has anyone found a good, low cost, one?

I can't really vouch for these, but some time ago when I was shopping I ran across these two:

Fidelity:
http://www.chartbook.fid-intl.com/fi/current/0298.pdf

Mainstay:
http://www.nylim.com/mainstayfunds/0,2058,20_1002519,00.html

I ended up not buying an international bond fund and I really didn't even complete my search. But these funds might provide you with something to start comparing to. Good luck

 

[Red-y]

I did some research on Morningstar a while back to pick some very adventurous foreign bond funds and came up with these two:

Fidelity New Markets (FNMIX) with an exp. ratio of 1.00, currently yielding 5.83%

and

Loomis Sayles Global Bond (LSGLX) with an exp. ratio of 1.15, currently yielding 3.98%.

The Fidelity fund is in Emerging markets. Be prepared to ride a lot of ups and downs with these, but the yields are attactive.

 

[bongo2]

For anyone who does own an international bond fund -- should it be held in a taxable or tax deferred account? Do you get a foreign tax credit that offsets your taxes in the US that is worthless in a tax deferred account?

 

[cute fuzzy bunny]

Some of the vanguard funds do carry a portion of foreign bonds. Without looking, I think about 5% of the Wellesley fund is foreign bond. Maybe its just 5% of the bond component. In my fiancees portfolio, I parked 5% of her total IRA in a broad foreign bond index, but its not a vanguard based IRA. I probably wouldnt carry more than 2-5% of my total net worth in foreign bonds. The extra yield is nice but I'd probably consider domestic high yields or REITS before I'd bite off too much in foreign paper. A nice 9th inning portfolio diversifier in the vein of precious metals, commodities, and the like.

As far as emerging markets, I'll semi-quote a group of emerging market bond analysts who yesterday said they're glad they're emerging market bond analysts and not emerging market bond investors. I'd probably be more comfortable speculating in some depressed real estate or one of the funds that works with very low rated domestic debt before I'd wade into these too far.

 

[trumpeting_angel]

The Bernstein Bible recommends 5% for a relatively risk-tolerant investor, no more than 15%, if I recall correctly.

Aren't we all supposed to nod sagely and pat each other on the back when one asset class, or another, or even all of them, head down? And congratulate ourselves for having the wisdom to rise above the general dysphoria?

It's hard to stay the course, I'll bet, especially after you retire. I'm trying to get the hang of it. I called Vanguard today to move all my old 401(k)'s which are invested hither and yon. I got the happy news that if I move $100K or more of old IRAs into Vanguard at once, I get a professional handholder free of charge to fill out all those pesky forms for me to sign. I didn't turn it down!

Soon I'll be asset-allocated a la Bernstein/Burns/Bogle. Next I buy some rental property, I think.

Anne

 

[charlie]

Anne,

I think you did the right thing!

Best of luck,

Charlie (aka Chuck-Lyn)

 

[trumpeting_angel]

Thanks, Charlie!

I got advice here about who to read on real estate investing (McLean & Eldred). Too many wealthy gurus out there who got rich from handing out bad advice. But these authors ("Investing in Real Estate") are clearly judicious, knowledgeable, and cautious, yet still are selling me on real estate as an investment.

It doesn't look like stocks are going to make us rich any time soon (yes, I've been reading Bernstein), and I want to keep moving in the direction of getting my money to make some money for me.

I probably would have found my way to modern portfolio theory without the ER Forum, but it sure has been helpful.

Anne

 

[chickbull]

I own 2 closed end bond funds, FAX and GIM. You might look at these and buy them at a discount.

 

[AlanS]

IndexInvestor.com recommends T Rowe Price International Bond Fund (RPIBX). In some of their portfolios they suggest a significant percentage of foreign bonds, depending on your objectives. They present some research that shows in some cases foreign bonds give more diversification benefits than do foreign stocks. They have a lot of good free stuff, but to get all the reports, you will have to pay $25 per year. I joined a few months ago and have got my moneys worth.

Alan