The Case For Global Bonds
PGIM Fixed Income examines how an actively-managed, hedged global bond portfolio can reduce volatility and improve return efficiency relative to a domestic-only, fixed income allocation over the intermediate to long term.
PGIM Fixed Income explores the potential rewards and risks of expanding a fixed income allocation beyond a domestic-only market. In this paper, they examine how an actively-managed, broad global bond allocation, generally currency hedged, can reduce volatility and improve return efficiency by providing three potential benefits: • The mitigation of concentrated interest rate risk in the investor's domestic market; • Diversified exposure to the broadest available set of global credit sectors and issuers; and • The ability to dynamically capture the most attractive global term premia and credit spreads from country allocation, as well as sector and security selection
Authors: Arvind Rajan, PhD, Managing Director, Head of Global and Macro, PGIM Fixed Income; Robert Tipp, CFA, Managing Director, Chief Investment Strategist and Head of Global Bonds, PGIM Fixed Income