foreign bond

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Foreign bond

A bond of a non-domestic company issued on the domestic capital market.

Foreign Bond

A bond traded in a given country that was issued by a foreign government or company. The foreign bond market trades in the domestic currency and is regulated by domestic regulators.

foreign bond

A debt security issued by a borrower from outside the country in whose currency the bond is denominated and in which the bond is sold. A bond denominated in U.S. dollars that is issued in the United States by the government of Canada is a foreign bond. A foreign bond allows an investor a measure of international diversification without subjection to the risk of changes in relative currency values. See also Eurobond.
Is it risky to invest in foreign securities?

Investing in foreign securities can actually reduce your overall portfolio risk and at the same time modestly increase the potential for returns. The U.S. stock market still remains the largest in the world; however, foreign markets now account for approximately 50% of the global stock market capitalization. Consequently, it is becoming more important to diversify portfolios globally, taking advantage of growth rates in different regions and countries. Proper international diversification can help balance out your returns by reducing or avoiding losses when the U.S. markets are underperforming.

Thomas M. Tarnowski, Senior Business Analyst, Global Investment Banking Division, Citigroup, Inc.—Salomon Smith Barney, New York, NY, and London, UK
References in periodicals archive ?
9 billion from the upward-revised nearly $7 billion in the third quarter, while net purchases of foreign bonds increased to nearly $6.
5 billion invested in short-term governments and corporates, with a small weighting in foreign bonds.
Japanese politicians and economists have increased their calls on the Bank of Japan to buy foreign bonds to stem the appreciation of the yen and lift the Japanese economy out of deflation.
Economic and fiscal minister Heizo Takenaka said Tuesday it is technically possible for the Bank of Japan (BOJ) to purchase foreign bonds to control liquidity in the money market.
According to InterMarket Income Trust portfolio manager Carl Ericson, "Recently the Fund has reduced the proportion of its portfolio held in foreign bonds owing to increased volatility in that sector.
The company's investment portfolio consists of high-grade Japanese and foreign bonds.
7 billion yen at the end of calendar 2011, of which domestic bonds accounted for 67 percent, domestic stocks 11 percent, foreign stocks 10 percent and foreign bonds 8 percent.
Bank of Japan (BOJ) Governor Masaru Hayami said Thursday the current law makes it difficult for the central bank to purchase foreign bonds.
Strongin noted foreign equities were favored over foreign bonds for the second consecutive year.
The dollar was bought by some investors in a knee-jerk reaction in the morning after Japanese Finance Minister Jun Azumi reportedly said the Bank of Japan's buying of foreign bonds might be equivalent to a currency intervention.
With regard to a foreign press report that the central bank is considering purchasing foreign bonds, Nakahara also denied that the bank needs to buy them to provide liquidity to the financial market.

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