What are international government bonds?International government bonds are mostly fixed-rate debentures issued by public corporations of a state in order to finance infrastructure projects and other tasks of the community. Therefore the maturities of international government bonds are medium to long term. Depending on the rating of the respective country, these bonds are considered a safe investment, because the redemption is guaranteed by a steady flow of tax income. Given the high degree of safety, the interest rate is moderate. But you have to bear in mind: the higher the interest rate paid, the higher the potential risk of default. |
How do international government bonds work?You buy an international government bond at its issue price as security with fixed or floating interest rate. The interest (coupon) is paid annually. At the end of maturity the bond is redeemed in full. Your advantage as investor: you know right from the start what amount you will receive at the end of the term. If you buy government bonds in foreign currencies, i.e. so-called foreign bonds, you should take the currency risk into consideration. |
Your benefitsInternational government bonds are suitable as long-term investment. They are strongly secured, which is why conservative investors will find them particularly useful: they offer solid investment opportunities with transparent and predictable chances of making a profit. |
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How do international government bonds react to…… rising interest rates? … stable interest rates? … falling interest rates? |