Foreign-Issued Bonds

What this video covers

• Why a foreign bond can hold its value while the investor's payout still drops 10%, and the four additional risks beyond normal domestic bond risk
• What sovereign risk truly encompasses: political instability, currency controls, economic policy changes, and default, plus why no bankruptcy court exists for foreign governments
• How currency risk operates as a separate, independent layer on top of interest rate risk, and the direction of gain or loss when a foreign currency strengthens or weakens against the U.S. dollar
• What a Eurobond is: issued in a currency different from the host country's currency, and why the "Euro" prefix does not limit issuance to Europe
• What a Yankee bond is: a foreign entity issuing in the U.S. market denominated in U.S. dollars (USD), and why this eliminates currency risk for U.S. investors while shifting that risk to the foreign issuer
• Which risk Yuri the Yankee bond still carries into Ivy's portfolio even though currency risk is gone