Investing in international bonds
If you opt to invest in South African bonds, you’re limited to government bonds and South African corporations that issue bonds.
One of the easiest ways to invest in these types of bonds is through a unit trust. You buy into a unit trust, and the fund manager takes care of the rest. He picks bonds with different maturities and interest rates.
But if you’re looking for exposure to international bonds
, it’s easy to achieve.
You can invest in international bond funds through South African fund managers. They do all the searching and investing in bonds for you. You just have to buy units in the fund.
This is convenient as you don’t have to apply for your offshore allowance. You buy into the fund with rands.
How to invest in international bonds offshore
If you want to look beyond investing in South African international bond funds, you can invest in different offshore-based international bond funds.
The key here is to look at well-known, reputable international fund managers. You need to research the fund manager as well as the fund before committing a cent.
One example to consider is the Templeton Global Bond Fund in the US. It has a good track record. And it attracts high ratings.
To invest in a fund like this, you’re talking about a minimum investment of $5,000, with an annual management fee of 0.75%.
This fund sticks to high investment grade bonds. This is an essential aspect to check with all bond funds. If you invest into bond funds which buy low grade bonds, your risks increase.
So there you have it, how you can invest in international bonds.
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