Broad exposure is crucial in a portfolio of global bonds

When evaluating the role of global bonds in portfolio allocation, it is useful to analogise it to the role of global equities in an equity portfolio. As US equity-only captures 20% of the global equity market, investing in global equities allows exposure to the remaining 80% of the market. In the same vein, US international debt securities account for only 20% of the worldwide total, leaving 80% of the market untapped. In fact, over half the countries in the world have functional and accessible bond markets that can provide added sources of diversification and alpha to a global bond portfo...