will bonds be impacted by the current geopolitical scenario? I’m panicking!! 40% of my equity portfolio is already down. I’m worried about my fixed income investments now ugh
As long as there is no credit risk in the issuer of bonds and you are willing to hold until maturity, you should be ok. If your investments in Bond Funds is through a mutual fund, then even if one corporate defaults, you should be ok. Not an expert these are my personal views.
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Yes. There is interest rate risk. If people dump Indian bonds, and yields spike up as you are seeing now, bond value will drop significantly especially long term bonds. Short term bonds are relatively safer in this regard.
Default risk is also not 0. In fact the risk of India default is also tradeable… called India credit default swaps. Current India 5y CDS can be found here: https://in.investing.com/rates-bonds/india-cds-5-year-usd If someone buys India cds swaps, they gain when India defaults or at least close to it than when they bought the swap. It’s currently trading at 52 weeks high. In any case, the risk is not 0 as some would want you to believe. You can’t blindly trust sovereign. Sovereign also means the ability to say your bonds are worth 0 and there’s nothing you can do about it.
Comparative world economy CDS:
https://in.investing.com/rates-bonds/world-cds
A primer on CDS: https://www.ifsahansraj.com/post/the-big-short-to-bharat-decoding-credit-default-swaps-and-india-s-missed-opportunity
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Which bonds?
Why?
Did you have any goals/milestones in the near feature?
When?
Which of your assets/cash-flows had you ear-marked for them?
How are they performing?
Which ones? Why exactly worried?