While the slower pace of international economic growth has hurt foreign stocks this year, the resulting lower interest rates overseas has helped foreign bonds (particularly in funds/indices that hedge currency risk). For instance, Vanguard Total International Bond Index Fund (VTIBX) is up 1% this year, while Vanguard Total U.S. Bond Index Fund (VBTIX) is down 2%.

Though the European Central Bank’s (ECB) recently announced plan to halt its bond-buying program could put upward pressure on rates eventually, the ECB also stressed that it would remain “patient” in raising short-term rates (dismissing any such action until at least after the Summer of 2019).

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