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International Bond Portfolio

1. Introduction
The bond market is one of the largest and most important markets in the world. For professional investors, building and managing a portfolio of bonds to achieve above-market returns is continual challenge. The international bond market is a market that allows investors from around the globe to participate in an environment that offers diversity and at the same time, one that is dynamic. The investor is surrounded with numerous options from the many different types of bond instruments available to him today.

The first part of this paper introduces the different types of bond markets available to investors as well as their relative differences and strengths. Of all the bond markets present, the Eurobond market is the most attractive and popular to international investors. Next, emphasis is placed on Floating Rate Notes as well as Structured Notes which are two types of bond instruments that investors could find favourable.

The second part of the paper illustrates the Multi-Currency Approach to Bond Investments provided with a detailed analysis of International Bond Portfolio Management. Careful attention is paid to passive as well as active bond strategies in managing bond portfolios against the potential risks that portfolios could be exposed to.

The aim of this paper is to display how all of these aspects come together to assist international investors in building and managing their desired portfolios. Active participation of investors on the global market has been increasing due to many factors, such as the acknowledgement of the benefits that are possible from international diversification in terms of risk and return. Global development and improvement has given rise to bond markets that offer lower costs, ease of communication, and almost endless access of information to keen investors.

2. The Global Bond Market
The market for debt financing developed into a global bond market several centuries ago, long before an equity market...