Does Your Bond Portfolio Need a Passport?


What do vacations and bond portfolios have in common? Expanding beyond opportunities in your home country may be the ticket to enhanced experiences.

Yield curves for bonds issued in different currencies do not move in lockstep. That means portfolio volatility arising from changes in one market’s interest rates may be mitigated through global diversification. Since September 2000, global bond indices had markedly lower standard deviations than US indices, whether for the markets in aggregate or separately within the government and credit segments.


exhibit 1

Global Path to a Smoother Ride

Annualized standard deviation, September 1, 2000–October 31, 2023

Past performance is not a guarantee of future results.

Global ex US: Bloomberg Global Aggregate ex-USD Bond Index (hedged to USD). Global: Bloomberg Global Aggregate Bond Index (hedged to USD). US: Bloomberg US Aggregate Bond Index. Bloomberg data provided by Bloomberg Finance LP. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio.

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