Are USD hedged international bonds a better type of bond?

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dsasdg
Posts: 138
Joined: Sun Mar 21, 2021 4:24 am

Are USD hedged international bonds a better type of bond?

Post by dsasdg »

https://www.portfoliovisualizer.com/opt ... ints=false

It looks like they have better back-testing results and back-testing by asset class, they make up a huge portion of the maximal Sharpe ratio portfolio (>60%), even if back-testing from 2010 requires a minimum allocation of over 40% USD hedged international bonds.

https://www.portfoliovisualizer.com/opt ... ints=false
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galeno
Posts: 2653
Joined: Fri Dec 21, 2007 11:06 am

Re: Are USD hedged international bonds a better type of bond?

Post by galeno »

USD hedged world bonds try to eliminate the non-USD currency fluctuations. You should get a better risk-adjusted return.

Unhedged world bonds are more volatile. Because of the non-USD currency fluctuations. They could provide better ballast in an equity downturn.

For me it's a tough choice. VAGU vs AGGG.
KISS & STC.
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