Is total world bond safer than US treasuries?

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fortyofforty
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Re: Is total world bond safer than US treasuries?

Post by fortyofforty »

DB2 wrote: Mon Dec 30, 2019 9:49 am
JoMoney wrote: Mon Dec 30, 2019 9:33 am
fortyofforty wrote: Mon Dec 30, 2019 7:38 am...
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
My assumption, is that people expect volatility and unpredictable returns from their "risky" stocks, and don't regard the currency risk as problematic.
For those that use bonds as their "safety" bucket/allocation, currency risk means they are not "safe". If you value bonds for what they are, literally a promise of how much you'll get paid/when, adding currency risk to it means you have no idea how much you receive at maturity in the currency your liabilities are denominated in.
Agreed and some people use other means for bonds. For example, one might use CDs and they are not going to globally market cap a CD. :)
Wouldn't adding an asset sub-class like international bonds tend to reduce the overall volatility of returns of the bond portion of a portfolio? Owning the haystack should apply equally to stocks and bonds, right? You don't add international equities to boost returns, you add them to reduce portfolio concentration and increase diversification in order to reduce overall risk.
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Re: Is total world bond safer than US treasuries?

Post by DB2 »

fortyofforty wrote: Mon Dec 30, 2019 11:09 am
Wouldn't adding an asset sub-class like international bonds tend to reduce the overall volatility of returns of the bond portion of a portfolio? Owning the haystack should apply equally to stocks and bonds, right? You don't add international equities to boost returns, you add them to reduce portfolio concentration and increase diversification in order to reduce overall risk.
I agree. I also think it really just comes down to the individual's goal in regards to a non-equity allocation.
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Re: Is total world bond safer than US treasuries?

Post by danielc »

willthrill81 wrote: Sat Dec 28, 2019 11:55 am
danielc wrote: Sat Dec 28, 2019 11:49 amBut I am not a market timer and I will not guess whether the Fed or the ECB is more likely to raise interest rates. I am a passive investor and I prefer to maintain a constant diversified portfolio.
Given that bonds' yield has been an excellent predictor of their return, I would have a hard time buying bonds that currently have a negative real yield. That might still be better than cash, so I won't say 'never', but the argument for pure passivity when it comes to bonds/CDs/cash is much less convincing to me than for stocks.
I do see your point, and in fairness I am not 100% passive when it comes to bonds/CDs/cash. Because of the very low yield environment right now I've decided to have a very small bond allocation for now, and I've moved my emergency fund from treasuries to an ETF of ultra short term corporate bonds which gives me a better yield than treasuries for an acceptable volatility. But I haven't made an effort to tweak my small bond allocation between US, EAFE, and emerging markets.
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Re: Is total world bond safer than US treasuries?

Post by mervinj7 »

danielc wrote: Mon Dec 30, 2019 12:37 pm I do see your point, and in fairness I am not 100% passive when it comes to bonds/CDs/cash. Because of the very low yield environment right now I've decided to have a very small bond allocation for now, and I've moved my emergency fund from treasuries to an ETF of ultra short term corporate bonds which gives me a better yield than treasuries for an acceptable volatility. But I haven't made an effort to tweak my small bond allocation between US, EAFE, and emerging markets.
Do you use an ETF like ICSH for your ultra short term corporate bond holding?
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Re: Is total world bond safer than US treasuries?

Post by Northern Flicker »

Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
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Re: Is total world bond safer than US treasuries?

Post by EnjoyIt »

willthrill81 wrote: Fri Dec 27, 2019 2:42 pm
Blue456 wrote: Thu Dec 26, 2019 10:20 pm But wouldn't spreading your risk in more than one country be safer?
If the U.S. Treasury defaults on its bond obligations, the entire global financial system may go down the toilet.
mongstradamus wrote: Fri Dec 27, 2019 1:57 pm For me personally if something happened where US government defaulted on their treasuries , we as us citizens would have a lot more things to worry about.
columbia wrote: Fri Dec 27, 2019 2:15 pmThere are no plausible backup plans if the US government starts defaulting, as that likely means that equities have dropped 99% too; were into guns, ammo and dehydrated food scenarios, at that point.
:thumbsup
There is a saying I am probably paraphrasing
"When America sneezes, the world catches a cold."

I am prepared though. If the US defaults, we have lots of ammo and a special set of skills that will allow us to survive.

Living in the US, I will stick with US bonds only.
A time to EVALUATE your jitters: | https://www.bogleheads.org/forum/viewtopic.php?f=10&t=79939&start=400#p5275418
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Re: Is total world bond safer than US treasuries?

Post by columbia »

I have no survival skills (other than cooking). :(
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Re: Is total world bond safer than US treasuries?

Post by willthrill81 »

columbia wrote: Tue Dec 31, 2019 3:11 pm I have no survival skills (other than cooking). :(
You would probably learn quickly. :)
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Re: Is total world bond safer than US treasuries?

Post by fortyofforty »

Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
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Re: Is total world bond safer than US treasuries?

Post by willthrill81 »

fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
Increasing diversification does decrease idiosyncratic risk (at a decreasing rate) within a particular market. But domestic bonds and foreign bonds are not in the same market. There is a qualitative difference between bonds that are denominated in the currency you'll later be spending and those that aren't. By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk. Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well. Investors must ask themselves whether and how much additional diversification they want from owning foreign assets given the new and/or increased risks associated with doing so. The tremendous variation among perspectives on this should, if nothing else, indicate that this is a highly individualistic decision, and I suspect that there are many assumptions underlying all of the positions taken on it.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Is total world bond safer than US treasuries?

Post by fortyofforty »

willthrill81 wrote: Tue Dec 31, 2019 3:23 pm
fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
Increasing diversification does decrease idiosyncratic risk (at a decreasing rate) within a particular market. But domestic bonds and foreign bonds are not in the same market. There is a qualitative difference between bonds that are denominated in the currency you'll later be spending and those that aren't. By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk. Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well. Investors must ask themselves whether and how much additional diversification they want from owning foreign assets given the new and/or increased risks associated with doing so. The tremendous variation among perspectives on this should, if nothing else, indicate that this is a highly individualistic decision, and I suspect that there are many assumptions underlying all of the positions taken on it.
Exactly. And, as Taylor often reminds us, when experts disagree, there is likely to be only slight differences in probable outcomes.
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Re: Is total world bond safer than US treasuries?

Post by lazyday »

Luckily, almost all experts agree that we should diversify equity internationally.

For bonds, I agree it might not matter a great deal.
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Re: Is total world bond safer than US treasuries?

Post by flamesabers »

Blue456 wrote: Thu Dec 26, 2019 9:27 pm Seems like general consensus is that US treasuries are safer than bonds. But wouldn't total world bond be safer than US treasuries? I mean you are diversifying bonds among different countries.
If you're making the argument that international bonds are a safer investment then US treasuries, couldn't a similar argument be made for keeping foreign currency in foreign banks for diversity sake? After all, US treasuries and the FDIC are both backed by the federal government.

Also, if the answer to your question is true, it doesn't answer how much safer international bonds are or whether they're always (versus sometimes) safer then US treasuries.
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Re: Is total world bond safer than US treasuries?

Post by Blue456 »

flamesabers wrote: Tue Dec 31, 2019 5:07 pm
Blue456 wrote: Thu Dec 26, 2019 9:27 pm Seems like general consensus is that US treasuries are safer than bonds. But wouldn't total world bond be safer than US treasuries? I mean you are diversifying bonds among different countries.
If you're making the argument that international bonds are a safer investment then US treasuries, couldn't a similar argument be made for keeping foreign currency in foreign banks for diversity sake? After all, US treasuries and the FDIC are both backed by the federal government.
But wouldn't it be safer to have investments backed by more than one government? On the other hand let me ask you, how often throughout history has a country done well and then completely failed?
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Re: Is total world bond safer than US treasuries?

Post by willthrill81 »

Blue456 wrote: Tue Dec 31, 2019 9:41 pm
flamesabers wrote: Tue Dec 31, 2019 5:07 pm
Blue456 wrote: Thu Dec 26, 2019 9:27 pm Seems like general consensus is that US treasuries are safer than bonds. But wouldn't total world bond be safer than US treasuries? I mean you are diversifying bonds among different countries.
If you're making the argument that international bonds are a safer investment then US treasuries, couldn't a similar argument be made for keeping foreign currency in foreign banks for diversity sake? After all, US treasuries and the FDIC are both backed by the federal government.
But wouldn't it be safer to have investments backed by more than one government? On the other hand let me ask you, how often throughout history has a country done well and then completely failed?
As noted above, if the U.S. defaults on its bond obligations, many (most?) believe that this would have cascading effects throughout the global economy, leading to a severe depression if not a complete financial collapse. This isn't tin-foil hat thinking. As such, there may not be any diversification benefit with regard to credit (i.e. default) risk by owning foreign bonds. Now if foreign bonds were yielding significantly more than U.S. bonds, that might be enough to compensate for the currency risk and increased inflation risk stemming from foreign bonds. But when it comes to OECD nations, the yields on U.S. bonds are among the best of the bunch. In fact, the only OECD countries I'm seeing with higher long-term yields are Mexico, Iceland, Chile, and Poland. How many of them do you feel better about than the U.S.?
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Re: Is total world bond safer than US treasuries?

Post by Dead Man Walking »

columbia wrote: Sat Dec 28, 2019 1:40 pm I wouldn’t own it, but BNDX has certainly succeeded at giving higher returns with lower volatility (and significantly higher risk adjusted return) since its inception:
https://www.portfoliovisualizer.com/bac ... ion2_2=100

I wouldn’t translate that to “safer”, but it is something.
Columbia,

The bond allocation in many portfolios exists to lower risk and volatility. The link you have provided illustrates that BNDX has provided higher returns with lower volatility than VGIT; however, approximately 3.53% of the annualized return of BNDX is due to currency hedging according to Morningstar. Currency hedging not only reduces volatility but also isolates the credit and interest rate risk of foreign bonds. Currency hedging may not provide increased total return in the future. I agree that it’s not necessarily safer, but it is something.

Another factor that may influence the total return and volatility of foreign bonds is negative interest rates. We don’t have data that demonstrates the affect negative interest rates will have over the long term. Some analysts think negative rates is a risk story that will end badly. I’d provide links, but all the articles that I have read contain political content that is prohibited on this forum. Due to the currency play and negative interest rates, I choose not to invest in BNDX even though it is probably the best way to invest in the world’s largest asset class. I do invest in international equities.

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Re: Is total world bond safer than US treasuries?

Post by watchnerd »

mongstradamus wrote: Thu Dec 26, 2019 11:01 pm Isn’t vsigx, the index version of intermediate treasuries , the closest you can get to 100 percent treasuries.
Or the short (VGSH) and long (VGLT) versions of you want different duration.

GOVT is a "total treasuries market" fund.

I wish Vanguard would make an equivalent.
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Re: Is total world bond safer than US treasuries?

Post by Forester »

I would think a developed index that's something like 60-30-20-10 US-Euro-Japan-Australia/Other is optimal. And perhaps some inflation-linked bonds in one own currency. Imagine a bond-heavy investor trusting 70% of their portfolio to the whim of one entity, maybe not wise.
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Re: Is total world bond safer than US treasuries?

Post by fortyofforty »

lazyday wrote: Tue Dec 31, 2019 4:26 pm Luckily, almost all experts agree that we should diversify equity internationally.

For bonds, I agree it might not matter a great deal.
True, for international equities it's been a drag for a decade or more, although it shouldn't matter a great deal in the long run. For bonds, experts at distinguished houses like Vanguard are starting to come around, as the ability to acquire international debt becomes easier and the mantra of "diversification über alles" is carried to the next logical level.
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Re: Is total world bond safer than US treasuries?

Post by Northern Flicker »

fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
It nonetheless may be a point of resistance of many US investors. The buy the whole haystack argument can be a specious one because you will draw the line somewhere with investability screens. BNDX does not hold junk frontier market bonds. Once you decide on your screening limits, it defines the limit of your haystack. Buy the whole haystack actually refers to full diversification in the implementation of an asset class. It does not mean you have to own every haystack/asset class.
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Re: Is total world bond safer than US treasuries?

Post by fortyofforty »

Northern Flicker wrote: Wed Jan 01, 2020 7:43 pm
fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
It nonetheless may be a point of resistance of many US investors. The buy the whole haystack argument can be a specious one because you will draw the line somewhere with investability screens. BNDX does not hold junk frontier market bonds. Once you decide on your screening limits, it defines the limit of your haystack. Buy the whole haystack actually refers to full diversification in the implementation of an asset class. It does not mean you have to own every haystack/asset class.
No doubt. Just like there are plenty of real justifications for avoiding international stocks, or emerging market stocks, or international microcap stocks. Nobody owns every haystack, and few own haystacks in perfect market capitalization weight. If you choose to own an asset class such as bonds, then the "own the haystack" rule would apply. Except when it doesn't.

Purity tests are a dangerous game. Every investor can set her own screening limits, even within asset classes. Diversification apparently decreases risk, except when it increases risk. It's a free lunch that is sometimes costly. Enjoy! :beer
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Re: Is total world bond safer than US treasuries?

Post by ThePrince »

willthrill81 wrote: Tue Dec 31, 2019 3:23 pm
fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
Increasing diversification does decrease idiosyncratic risk (at a decreasing rate) within a particular market. But domestic bonds and foreign bonds are not in the same market. There is a qualitative difference between bonds that are denominated in the currency you'll later be spending and those that aren't. By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk. Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well. Investors must ask themselves whether and how much additional diversification they want from owning foreign assets given the new and/or increased risks associated with doing so. The tremendous variation among perspectives on this should, if nothing else, indicate that this is a highly individualistic decision, and I suspect that there are many assumptions underlying all of the positions taken on it.
I want to recall BNDX (and therefore, BNDW) hedges out/against currency risks. Is this your understanding?
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Re: Is total world bond safer than US treasuries?

Post by willthrill81 »

ThePrince wrote: Wed Jan 01, 2020 11:39 pm
willthrill81 wrote: Tue Dec 31, 2019 3:23 pm
fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
Increasing diversification does decrease idiosyncratic risk (at a decreasing rate) within a particular market. But domestic bonds and foreign bonds are not in the same market. There is a qualitative difference between bonds that are denominated in the currency you'll later be spending and those that aren't. By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk. Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well. Investors must ask themselves whether and how much additional diversification they want from owning foreign assets given the new and/or increased risks associated with doing so. The tremendous variation among perspectives on this should, if nothing else, indicate that this is a highly individualistic decision, and I suspect that there are many assumptions underlying all of the positions taken on it.
I want to recall BNDX (and therefore, BNDW) hedges out/against currency risks. Is this your understanding?
Yes, it is currency hedged, but the hedging must be paid for, and there is still a small risk that the hedging will not be entirely effective.
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Re: Is total world bond safer than US treasuries?

Post by abuss368 »

ThePrince wrote: Wed Jan 01, 2020 11:39 pm
willthrill81 wrote: Tue Dec 31, 2019 3:23 pm
fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Seems exactly the same as for international equities. Yet, there seems to be a much greater consensus for the "value" of adding international equities to a portfolio of domestic equities, than for adding international bonds. I don't understand fully the reason for this dichotomy.
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
Increasing diversification does decrease idiosyncratic risk (at a decreasing rate) within a particular market. But domestic bonds and foreign bonds are not in the same market. There is a qualitative difference between bonds that are denominated in the currency you'll later be spending and those that aren't. By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk. Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well. Investors must ask themselves whether and how much additional diversification they want from owning foreign assets given the new and/or increased risks associated with doing so. The tremendous variation among perspectives on this should, if nothing else, indicate that this is a highly individualistic decision, and I suspect that there are many assumptions underlying all of the positions taken on it.
I want to recall BNDX (and therefore, BNDW) hedges out/against currency risks. Is this your understanding?
Yes. Vanguard Total International Bond Index hedges currency. There is a cost to that. Will the hedge always work is anyone’s guess.
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Re: Is total world bond safer than US treasuries?

Post by Dude2 »

One reason to be in BNDX or BNDW is our belief that indexing works, i.e. is the most effective investment strategy. Let the market determine what it considers valuable and not valuable and sample that based on market cap weight. Why should we turn our back on the largest asset class in the world? Also, these are bonds, we aren't exactly signing our death warrant by investing in them. If there is more risk (if they are not safer), there could also be more reward, or, from a total portfolio perspective, there may be more exposure to things that zig when others zag.
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Re: Is total world bond safer than US treasuries?

Post by watchnerd »

Dude2 wrote: Thu Jan 02, 2020 12:23 am One reason to be in BNDX or BNDW is our belief that indexing works, i.e. is the most effective investment strategy. Let the market determine what it considers valuable and not valuable and sample that based on market cap weight. Why should we turn our back on the largest asset class in the world? Also, these are bonds, we aren't exactly signing our death warrant by investing in them. If there is more risk (if they are not safer), there could also be more reward, or, from a total portfolio perspective, there may be more exposure to things that zig when others zag.
The global bond market is not necessarily an efficient market, which questions the efficacy of indexing.

Look at euro bonds that are offering negative yield, but required by some euro nations to be held by banks as reserve capital -- the negative rate is an attempt to force them to make loans.

Or Japanese debt, currently rated down with Slovenia and paying practically nothing.

I'm all in favor of market weighting for where it makes sense -- hence my 50/50 US/ex-US stock split.

But I don't think bonds are one of those areas, especially if USD-hedged.
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Re: Is total world bond safer than US treasuries?

Post by EnjoyIt »

Any chance someone is willing to explain how currency hedging contracts increase returns and decrease risk with this international bond products?
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Re: Is total world bond safer than US treasuries?

Post by Dude2 »

EnjoyIt wrote: Thu Jan 02, 2020 12:35 am Any chance someone is willing to explain how currency hedging contracts increase returns and decrease risk with this international bond products?
Here is a grok quote from an old thread...
grok87 wrote: Sat Jun 28, 2014 8:05 pm
Austintatious wrote:A couple of questions regarding Bernstein's comments that perhaps someone will help me with:

1) He suggests that foreign bonds, plus currency hedging, basically equals U. S. bonds. Why would the hedging turn foreign bonds into domestic bonds? I can see that it makes them similar to domestic bonds in terms of currency stability, but they're still foreign bonds and not domestic bonds.

2) Why would investing in a total foreign bond market fund only offer "trivial" diversification? It's half or more of the world bond market, is it not? Why does this very large part of the total market get so little respect, especially with hedging in the picture? This is an opinion we see often stated on the forum that just doesn't make sense to me, and I continue to wonder if it's more reflective of domestic bias rather than objectivity. I realize, of course, this is Bill Bernstein and Jack Bogle and others whose opinions I much value and whose knowledge re investing is light years ahead of my own, but still .......
First of all let me say that I generally agree with Dr. Bernstein's conclusion, i.e. that international bonds aren't worth it right now. I do have a bit of a different perspective on the currency hedging though...

1) there are basically two ways to currency hedge. let's take a 10 year German Bund as an example (in Euros).

a) one way is to do a currency swap on all the cash flows of the bond. let's keep things simple and assume annual interest payments. then the swap would comprise a series of 10 currency forward contracts.
-the first currency forward contract would hedge the first years interest/coupon payment from euros back to dollars.
- the second currency forward contact would hedge the second years interest/coupon payment from euros back to dollars....
- the 10th currency forward contract would hedge both principle and interest from euros back to dollars.

b) another way is to hedge using just a 1 month forward/futures contract from euros to dollars.

2) the two ways of hedging make the 10 year German Bund behave in very different ways

a) this way (the currency swap) effectively turns the 10 year German Bund into a 10 year US dollar bond. It is effectively the same as if the German government had issued as US dollar bond in the first place (which they sometimes do!) I believe this is the approach Dr. Bernstein has in mind. Their is a bit of diversification from being exposed to German government default risk instead of US government default risk, but that's it. It's effectively very much like a US treasury. If, for example US interest rates spike by 300 bps or so, this sort of bond would lose say 25% of its value just like a US treasury would.

b) this way (1 month currency future) is very different. The bond now has no foreign currency risk- it's been hedged back to US dollars. But the bond is still exposed to the german/euro yield curve rather than the US treasury yield curve. So if US treasuries spike by 300 bps, but the Euro yield curve does nothing, then this bond's value will not be hurt. Contrariwise if the German/euro yield curve spikes by 300 bps, but the US yield curve does nothing then this bond would lose 25%.

3) so what does the vanguard fund do in practice? from reading their white papers etc. it is clear that they do the b) type of hedging, i.e. the 1 month (or so) currency futures. that way they eliminate the currency risk but get the diversification of being exposed to different yield curves or interest rate risk. Just look at last year- that yield curve diversifcation showed up. the US bond market index fund lost money but the international bond market index fund gained.

hope this helps
cheers,
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Re: Is total world bond safer than US treasuries?

Post by fortyofforty »

willthrill81 wrote: Wed Jan 01, 2020 11:40 pm
ThePrince wrote: Wed Jan 01, 2020 11:39 pm
willthrill81 wrote: Tue Dec 31, 2019 3:23 pm
fortyofforty wrote: Tue Dec 31, 2019 3:15 pm
Northern Flicker wrote: Tue Dec 31, 2019 3:04 pm
Indeed, for US investors Vanguard recommends 40% of equities in non-US equities and 30% of bonds in currency-hedged non-US bonds.

There is no track record for how BNDX would perform during major equity downturns, which is the time investors should most care about how bonds are performing. I believe that is the resistance some US investors have to it.
Since I view past performance as an imperfect predictor for future results, I am not sure how much weight I'd give to that philosophy. In effect, the argument is that increasing diversification increases risk. That would tend to play into the hands of those who argue that a two-fund portfolio is all that is needed for most investors, and diversification is not truly a "free lunch".
Increasing diversification does decrease idiosyncratic risk (at a decreasing rate) within a particular market. But domestic bonds and foreign bonds are not in the same market. There is a qualitative difference between bonds that are denominated in the currency you'll later be spending and those that aren't. By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk. Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well. Investors must ask themselves whether and how much additional diversification they want from owning foreign assets given the new and/or increased risks associated with doing so. The tremendous variation among perspectives on this should, if nothing else, indicate that this is a highly individualistic decision, and I suspect that there are many assumptions underlying all of the positions taken on it.
I want to recall BNDX (and therefore, BNDW) hedges out/against currency risks. Is this your understanding?
Yes, it is currency hedged, but the hedging must be paid for, and there is still a small risk that the hedging will not be entirely effective.
I remember reading some time ago from Tweedy Browne that currency hedging can cost money, but it can also make money, and tends largely to balance out.
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Re: Is total world bond safer than US treasuries?

Post by Northern Flicker »

Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds.
Foreign sovereign bonds, currency-hedged or not, should perform better in USD terms than nominal treasuries if the US experiences robust inflation. The dollar would fall if there is robust inflation in the US, so it is obvious that unhedged non-US bonds would outperform treasuries.

Less obvious is that currency-hedged bonds also would be expected to overperform nominal treasuries. The hedge return is the difference in gap between US short rates and the short rate of a currency being hedged. US short rates would rise sharply if there were robust US inflation. This would lead to a significant rise in de facto yield of hedged non-US bonds but at the short duration of 30-day and 90-day forward contracts. This would not depress the prices of the non-US bonds (their prices would only fall if the unhedged bond yields rose). By contrast, yields of treasuries would rise sharply as well, but it would be associated with a fall in bond prices.

One issue though is such a scenario could create an imbalance in counterparties wanting to hedge. If everyone wants to hedge in one direction only, forex banks lose the ability to hedge at low cost because that is dependent on matching up counterparties so that the forex bank is not taking much if any currency risk in their portfolio of hedge contracts and thus does not have to charge much of a premium for the hedges.
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Re: Is total world bond safer than US treasuries?

Post by EnjoyIt »

Dude2 wrote: Thu Jan 02, 2020 6:51 am
EnjoyIt wrote: Thu Jan 02, 2020 12:35 am Any chance someone is willing to explain how currency hedging contracts increase returns and decrease risk with this international bond products?
Here is a grok quote from an old thread...
grok87 wrote: Sat Jun 28, 2014 8:05 pm
Austintatious wrote:A couple of questions regarding Bernstein's comments that perhaps someone will help me with:

1) He suggests that foreign bonds, plus currency hedging, basically equals U. S. bonds. Why would the hedging turn foreign bonds into domestic bonds? I can see that it makes them similar to domestic bonds in terms of currency stability, but they're still foreign bonds and not domestic bonds.

2) Why would investing in a total foreign bond market fund only offer "trivial" diversification? It's half or more of the world bond market, is it not? Why does this very large part of the total market get so little respect, especially with hedging in the picture? This is an opinion we see often stated on the forum that just doesn't make sense to me, and I continue to wonder if it's more reflective of domestic bias rather than objectivity. I realize, of course, this is Bill Bernstein and Jack Bogle and others whose opinions I much value and whose knowledge re investing is light years ahead of my own, but still .......
First of all let me say that I generally agree with Dr. Bernstein's conclusion, i.e. that international bonds aren't worth it right now. I do have a bit of a different perspective on the currency hedging though...

1) there are basically two ways to currency hedge. let's take a 10 year German Bund as an example (in Euros).

a) one way is to do a currency swap on all the cash flows of the bond. let's keep things simple and assume annual interest payments. then the swap would comprise a series of 10 currency forward contracts.
-the first currency forward contract would hedge the first years interest/coupon payment from euros back to dollars.
- the second currency forward contact would hedge the second years interest/coupon payment from euros back to dollars....
- the 10th currency forward contract would hedge both principle and interest from euros back to dollars.

b) another way is to hedge using just a 1 month forward/futures contract from euros to dollars.

2) the two ways of hedging make the 10 year German Bund behave in very different ways

a) this way (the currency swap) effectively turns the 10 year German Bund into a 10 year US dollar bond. It is effectively the same as if the German government had issued as US dollar bond in the first place (which they sometimes do!) I believe this is the approach Dr. Bernstein has in mind. Their is a bit of diversification from being exposed to German government default risk instead of US government default risk, but that's it. It's effectively very much like a US treasury. If, for example US interest rates spike by 300 bps or so, this sort of bond would lose say 25% of its value just like a US treasury would.

b) this way (1 month currency future) is very different. The bond now has no foreign currency risk- it's been hedged back to US dollars. But the bond is still exposed to the german/euro yield curve rather than the US treasury yield curve. So if US treasuries spike by 300 bps, but the Euro yield curve does nothing, then this bond's value will not be hurt. Contrariwise if the German/euro yield curve spikes by 300 bps, but the US yield curve does nothing then this bond would lose 25%.

3) so what does the vanguard fund do in practice? from reading their white papers etc. it is clear that they do the b) type of hedging, i.e. the 1 month (or so) currency futures. that way they eliminate the currency risk but get the diversification of being exposed to different yield curves or interest rate risk. Just look at last year- that yield curve diversifcation showed up. the US bond market index fund lost money but the international bond market index fund gained.

hope this helps
cheers,
Much appreciated. I simply do not a see a world where US government debt has a meltdown and the rest of the world is not affected. I suspect whatever happens in the US will unlikely be any better elsewhere in the world and I am wagering probably on average worse. Looks I am sticking with US bonds only.
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Re: Is total world bond safer than US treasuries?

Post by ohai »

EnjoyIt wrote: Thu Jan 02, 2020 10:19 am
Dude2 wrote: Thu Jan 02, 2020 6:51 am
EnjoyIt wrote: Thu Jan 02, 2020 12:35 am Any chance someone is willing to explain how currency hedging contracts increase returns and decrease risk with this international bond products?
Here is a grok quote from an old thread...
grok87 wrote: Sat Jun 28, 2014 8:05 pm
Austintatious wrote:A couple of questions regarding Bernstein's comments that perhaps someone will help me with:

1) He suggests that foreign bonds, plus currency hedging, basically equals U. S. bonds. Why would the hedging turn foreign bonds into domestic bonds? I can see that it makes them similar to domestic bonds in terms of currency stability, but they're still foreign bonds and not domestic bonds.

2) Why would investing in a total foreign bond market fund only offer "trivial" diversification? It's half or more of the world bond market, is it not? Why does this very large part of the total market get so little respect, especially with hedging in the picture? This is an opinion we see often stated on the forum that just doesn't make sense to me, and I continue to wonder if it's more reflective of domestic bias rather than objectivity. I realize, of course, this is Bill Bernstein and Jack Bogle and others whose opinions I much value and whose knowledge re investing is light years ahead of my own, but still .......
First of all let me say that I generally agree with Dr. Bernstein's conclusion, i.e. that international bonds aren't worth it right now. I do have a bit of a different perspective on the currency hedging though...

1) there are basically two ways to currency hedge. let's take a 10 year German Bund as an example (in Euros).

a) one way is to do a currency swap on all the cash flows of the bond. let's keep things simple and assume annual interest payments. then the swap would comprise a series of 10 currency forward contracts.
-the first currency forward contract would hedge the first years interest/coupon payment from euros back to dollars.
- the second currency forward contact would hedge the second years interest/coupon payment from euros back to dollars....
- the 10th currency forward contract would hedge both principle and interest from euros back to dollars.

b) another way is to hedge using just a 1 month forward/futures contract from euros to dollars.

2) the two ways of hedging make the 10 year German Bund behave in very different ways

a) this way (the currency swap) effectively turns the 10 year German Bund into a 10 year US dollar bond. It is effectively the same as if the German government had issued as US dollar bond in the first place (which they sometimes do!) I believe this is the approach Dr. Bernstein has in mind. Their is a bit of diversification from being exposed to German government default risk instead of US government default risk, but that's it. It's effectively very much like a US treasury. If, for example US interest rates spike by 300 bps or so, this sort of bond would lose say 25% of its value just like a US treasury would.

b) this way (1 month currency future) is very different. The bond now has no foreign currency risk- it's been hedged back to US dollars. But the bond is still exposed to the german/euro yield curve rather than the US treasury yield curve. So if US treasuries spike by 300 bps, but the Euro yield curve does nothing, then this bond's value will not be hurt. Contrariwise if the German/euro yield curve spikes by 300 bps, but the US yield curve does nothing then this bond would lose 25%.

3) so what does the vanguard fund do in practice? from reading their white papers etc. it is clear that they do the b) type of hedging, i.e. the 1 month (or so) currency futures. that way they eliminate the currency risk but get the diversification of being exposed to different yield curves or interest rate risk. Just look at last year- that yield curve diversifcation showed up. the US bond market index fund lost money but the international bond market index fund gained.

hope this helps
cheers,
Much appreciated. I simply do not a see a world where US government debt has a meltdown and the rest of the world is not affected. I suspect whatever happens in the US will unlikely be any better elsewhere in the world and I am wagering probably on average worse. Looks I am sticking with US bonds only.
In fact, when S&P (questionably) downgraded US government debt a few years ago, the price of US Treasuries increased, while most international assets decreased. No matter what the shock is - even if it is a downgrade of US itself, Treasuries are still preferred as the "safety asset".
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Re: Is total world bond safer than US treasuries?

Post by danielc »

mervinj7 wrote: Mon Dec 30, 2019 1:17 pm
danielc wrote: Mon Dec 30, 2019 12:37 pm I do see your point, and in fairness I am not 100% passive when it comes to bonds/CDs/cash. Because of the very low yield environment right now I've decided to have a very small bond allocation for now, and I've moved my emergency fund from treasuries to an ETF of ultra short term corporate bonds which gives me a better yield than treasuries for an acceptable volatility. But I haven't made an effort to tweak my small bond allocation between US, EAFE, and emerging markets.
Do you use an ETF like ICSH for your ultra short term corporate bond holding?
Yeah. I use JPST but it's very similar to ICSH.
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Re: Is total world bond safer than US treasuries?

Post by danielc »

willthrill81 wrote: Tue Dec 31, 2019 3:23 pm By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk.
This has been said many times already: You can hedge currency risk. Most international bond funds are currency hedged. That includes the funds from Vanguard and Fidelity for example. Hedging is not very expensive. Vanguard's paper arguing that international bonds improve the risk-adjusted return of a portfolio makes it clear that that conclusion is only true for currency hedged bonds.
willthrill81 wrote: Tue Dec 31, 2019 3:23 pm Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well.
I don't buy that argument for foreign stocks. Large cap companies are international. Toyota sells more cars in the US than in Japan. Everyone in the world drinks Coke and buys Nestle products. All large cap companies are effectively linked to an internationally weighted inflation pseudo-index. Ford doesn't give you much better inflation protection than Volkswagen. We should not think of Ford as a "domestic asset" and Volkswagen as a "foreign asset". The world is too globalized for that kind of reasoning.
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Re: Is total world bond safer than US treasuries?

Post by danielc »

flamesabers wrote: Tue Dec 31, 2019 5:07 pm
Blue456 wrote: Thu Dec 26, 2019 9:27 pm Seems like general consensus is that US treasuries are safer than bonds. But wouldn't total world bond be safer than US treasuries? I mean you are diversifying bonds among different countries.
If you're making the argument that international bonds are a safer investment then US treasuries, couldn't a similar argument be made for keeping foreign currency in foreign banks for diversity sake? After all, US treasuries and the FDIC are both backed by the federal government.
I'll never understand why, when they see the word "risk" in relation to bonds, so many people jump to extreme unlikely events like the kind where FDIC insurance matters. The main risk of bonds is that they go up and down in price when interest rates change, and that they will very likely fail to keep up with inflation after taxes are taken into account. FDIC insurance is nowhere near the top of the things you should keep in mind when you think about risk.
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Re: Is total world bond safer than US treasuries?

Post by watchnerd »

danielc wrote: Thu Jan 02, 2020 5:18 pm
I'll never understand why, when they see the word "risk" in relation to bonds, so many people jump to extreme unlikely events like the kind where FDIC insurance matters. The main risk of bonds is that they go up and down in price when interest rates change, and that they will very likely fail to keep up with inflation after taxes are taken into account. FDIC insurance is nowhere near the top of the things you should keep in mind when you think about risk.
Also, the net portfolio risk reduction of reducing equity exposure has diminishing returns as equity market risk gets incrementally removed.

As the bond portion increases, portfolio vulnerability to the factors you mention (interest rate / duration, inflation) goes up.

Diversifying into international bonds doesn't make these go away.
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Re: Is total world bond safer than US treasuries?

Post by willthrill81 »

danielc wrote: Thu Jan 02, 2020 5:14 pm
willthrill81 wrote: Tue Dec 31, 2019 3:23 pm By owning foreign bonds, you certainly increase your diversification, but you also introduce new risks, such as currency risk.
This has been said many times already: You can hedge currency risk. Most international bond funds are currency hedged. That includes the funds from Vanguard and Fidelity for example. Hedging is not very expensive. Vanguard's paper arguing that international bonds improve the risk-adjusted return of a portfolio makes it clear that that conclusion is only true for currency hedged bonds.
Hedging is neither free nor guaranteed to work as the investment prospectuses clearly state.

Certainly international bonds have improved the risk-adjusted returns of portfolios. Whether that is a worthwhile addition to any specific investor's portfolio going forward is unknown.
danielc wrote: Thu Jan 02, 2020 5:14 pm
willthrill81 wrote: Tue Dec 31, 2019 3:23 pm Also, inflation risk likely increases as well since domestic bond returns are partially linked to inflation, but this relationship is much weaker with foreign bonds. Note that these same issues apply to foreign stock as well.
I don't buy that argument for foreign stocks. Large cap companies are international. Toyota sells more cars in the US than in Japan. Everyone in the world drinks Coke and buys Nestle products. All large cap companies are effectively linked to an internationally weighted inflation pseudo-index. Ford doesn't give you much better inflation protection than Volkswagen. We should not think of Ford as a "domestic asset" and Volkswagen as a "foreign asset". The world is too globalized for that kind of reasoning.
If the world is truly that globalized, then it is a good argument in favor of at least tilting toward one's home country.
With inflation differences and exchange rate variations both affecting the results by double-digit percentages, it’s no wonder that simply buying US funds is insufficient to match US withdrawal rates for global investors. You can diversify your investments across assets and borders, but you can only live in one country at a time. And the inflation and currency in that home country matters a great deal to your financial security.

In fact, I would suggest that the data provides a good argument for investing (at least partially) in your home country. Not only will that bypass the effect of exchange rates, but it arguably also helps with inflation. Local stocks and bonds are not perfectly correlated to local inflation by any means, but local inflation is far more related to the local economy than to one halfway around the world. Completely detaching the engine of your returns from the inflation it needs to account for may have negative consequences for your portfolio that you did not anticipate.
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Re: Is total world bond safer than US treasuries?

Post by danielc »

willthrill81 wrote: Tue Dec 31, 2019 10:51 pm
Blue456 wrote: Tue Dec 31, 2019 9:41 pm But wouldn't it be safer to have investments backed by more than one government? On the other hand let me ask you, how often throughout history has a country done well and then completely failed?
As noted above, if the U.S. defaults on its bond obligations, many (most?) believe that this would have cascading effects throughout the global economy, leading to a severe depression if not a complete financial collapse.
[insert rant about people focusing on credit risk instead of more likely risks]

For the sake of argument, let's talk about default. Even if for some strange reason the main risk in your mind is the risk of default, it is important to realize that total default is extremely rare. This paper investigates the default rate of international bonds, starting just after the battle of Waterloo in 1815 to the present day. One of their key findings is that 100% default almost never happens; it really takes something like the communist revolutions in Russia, China, and Cuba, to get a 100% default. Even the complete break-up of the Astro-Hungarian empire and the Ottoman Empires did not result in complete default, but rather massive haircuts. For more likely but still extreme events like the Argentinian crisis and the Great Depression, what usually happens is that countries pay a portion of their debt. For example, they may negotiate a loan refinance with creditors, or they may make interest-only payments for several years while they get their house back in order. Most countries want to be part of the global economy after the crisis and will make an effort to limit loses for their creditors. So when we talk about the US defaulting on its debt, the mental picture we should all have is a more minor event like the US missing a coupon payment. Such a thing would be a major world event, but talk of global financial collapse is hyperbole.
willthrill81 wrote: Tue Dec 31, 2019 10:51 pm Now if foreign bonds were yielding significantly more than U.S. bonds, that might be enough to compensate for the currency risk and increased inflation risk stemming from foreign bonds.
Most international bond funds are currency hedged.
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Re: Is total world bond safer than US treasuries?

Post by danielc »

willthrill81 wrote: Thu Jan 02, 2020 5:31 pm
danielc wrote: Thu Jan 02, 2020 5:14 pm This has been said many times already: You can hedge currency risk. Most international bond funds are currency hedged. That includes the funds from Vanguard and Fidelity for example. Hedging is not very expensive. Vanguard's paper arguing that international bonds improve the risk-adjusted return of a portfolio makes it clear that that conclusion is only true for currency hedged bonds.
Hedging is neither free nor guaranteed to work as the investment prospectuses clearly state.
I didn't say "free". I said "not very expensive". I will worry about the higher ER of an international bond fund sooner than I'll worry about the cost of the currency hedge.
willthrill81 wrote: Thu Jan 02, 2020 5:31 pm If the world is truly that globalized, then it is a good argument in favor of at least tilting toward one's home country.
I don't see the argument, but no matter. Almost everyone has a home tilt. Very few in this forum have a truly total world portfolio.
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Re: Is total world bond safer than US treasuries?

Post by flamesabers »

danielc wrote: Thu Jan 02, 2020 5:18 pm
flamesabers wrote: Tue Dec 31, 2019 5:07 pm
Blue456 wrote: Thu Dec 26, 2019 9:27 pm Seems like general consensus is that US treasuries are safer than bonds. But wouldn't total world bond be safer than US treasuries? I mean you are diversifying bonds among different countries.
If you're making the argument that international bonds are a safer investment then US treasuries, couldn't a similar argument be made for keeping foreign currency in foreign banks for diversity sake? After all, US treasuries and the FDIC are both backed by the federal government.
I'll never understand why, when they see the word "risk" in relation to bonds, so many people jump to extreme unlikely events like the kind where FDIC insurance matters. The main risk of bonds is that they go up and down in price when interest rates change, and that they will very likely fail to keep up with inflation after taxes are taken into account. FDIC insurance is nowhere near the top of the things you should keep in mind when you think about risk.
When people talk about the safety of bonds, my immediate assumption is the risk of bonds defaulting. If the OP instead was asking about whether international bonds are better or worse at preserving its value compared to US treasuries, I wouldn't have mentioned FDIC insurance.
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Re: Is total world bond safer than US treasuries?

Post by columbia »

Today, investors will see the distinct difference between owning treasuries vs. other bonds.
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