Even though the U.S. bond market holds great attraction for investors, it has figured only infrequently among the top-performing markets worldwide in the recent past. Investing in foreign bonds, therefore, enhances the prospects of exposure to the best-performing foreign markets. Foreign bonds can also help to diversify currency exposure and provide protection against a long-term secular decline in the dollar. Mutual funds are a convenient way to give one’s portfolio the desired international fixed-income exposure.
Below we will share with you 5 top rated international bond funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all international bond funds, then click here.
Pioneer Global High Yield Fund A (PGHYX) primarily invests in high yield debt securities and preferred stocks of domestic and foreign issuers, rated below investment-grade. It may purchase bonds issued by both government and corporate bodies located in emerging markets. The international bond fund returned 64% over the last one year period.
Andrew Feltus is the fund manager and has managed this international bond fund since 2001.
Federated International High Income A (IHIAX) seeks to provide a high level of current income and invests heavily in emerging market debt securities. This international bond fund considers securities of varying durations and could also make significant investments in securities rated below investment grade. The fund has a ten year annualized return of 10.47%.
The international bond fund has a minimum initial investment of $1500 and an expense ratio of 1.17% compared to a category average of 1.33%.
Fidelity Advisor High Income A (FHIAX) invests in debt securities yielding high income, preferred stocks and convertible securities. The international bond fund seeks high income with capital appreciation as a secondary objective. In 2009, the fund was up 42%, outperforming its benchmark index.
As of November 2009, this international bond fund held 447 issues, with 0.96% of its total assets invested in Xerox Capital Trust I 8%.
JPMorgan Emerging Markets Debt Selection (JEMDX) invests at least 80% of assets in emerging-market debt investments, denominated in the U.S. dollar or foreign currencies. It is non-diversified and invests heavily in debt securities rated below investment-grade. It is a no load fund.
The international bond fund returned 41.4% in 2009 and has a ten year annualized return of 10.41%.
Putnam Global Income A (PGGIX) invests a majority of its assets in investment-grade debt securities. It concentrates on bonds with a maturity periods of at least three years and also considers purchases of securities rated below investment grade. This international bond fund returned 40% in 2009.
The Fund Manager is D. William Kohli and he has managed this international bond fund since 1994.
To view the Zacks Rank and past performance of all international bond funds, then click here.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/
