Is there way to invest in Foreign Govt Bonds? or Foreign Debt Mutual funds ? for NRI or Non NRI.
As an investor, finding low-risk options to hedge the overall risk of your investment portfolio is important. In India, the stock markets are highly volatile, and investors keep looking for instruments like bonds to reduce their investment risks without compromising heavily on the potential returns. In such a landscape, foreign government bonds can work as a good option.
The Indian bond market is still developing, with debt mutual funds being the primary option available to investors to invest in bonds. While recently, the government allowed retail investors to invest in Indian government bonds, liquidity is low. Therefore, many investors have started looking beyond borders to find bond investments that can help them hedge against adverse economic conditions.
You can invest in foreign government bonds by buying units of ETFs that have exposure to the foreign bond market. Many ETFs invest in international bonds to choose from. Open an account with a platform like Motilal Oswal and choose the ETF that invests in the country of your preference.
However, before you start investing, make sure that you assess the performance of the bond over the last few years and the ETF. While foreign government bonds might offer higher liquidity and lower sovereign risks, the returns might not be your expectations. Hence, ensure that you assess all aspects carefully before investing.