Developed market bonds

From the perspective of a U.S. domiciled investor, the international bond market makes up somewhat more than 35% of the market value of world investment markets (2011). The global market is commonly divided into developed market bonds and emerging market bonds. In many instances, many countries issue both nominal and inflation indexed debt securities.

Market index
The most recognized international developed market bond index is a subset of the Barclays Global Aggregate Index (also available in a float-adjusted version) which measures investment grade fixed-rate debt markets. The international developed market subset of the Global Aggregate Index consists of the following sub indexes:
 * Two major components
 * Pan-European Aggregate (EUR 300mn)
 * Asian-Pacific Aggregate Index (JPY 35bn).

The remainder of the index consists of Global Treasury(ex US treasuries), Eurodollar (USD 300mn), Euro-Yen (JPY 25bn), Canadian (USD 300mn equivalent) index-eligible securities not already in the two regional aggregate indices.

Barclays Capital also provides a benchmark for global inflation indexed bonds, the Barclays Capital World Government Inflation-Linked Bond Index. The international subset of this index includes bonds from UK, Australia, Canada, Sweden, France, Italy, Japan, and Germany.

Risks
Like all bonds, international bonds pay interest according to set schedules and return principal at maturity. In addition to risks common to all bonds (Bond Basics), international bonds bear currency risk unless this risk is hedged.