Government Bond Funds (continued)

More on Government Bond Funds (GBFs)

Municipal

High tax bracket investors who want to be more tax efficient may be interested in municipal bond funds because the income generated on them are federal government tax free. Some of these securities may also be local and state tax free to the investor if they are backed by projects in the investor’s state of residence. The municipal bond funds have lower yields and not all income from them is tax free.

International

International bond funds include a range of taxable bonds issued by foreign corporations and foreign governments. They help investors diversify their interest rates and economic risk across a wider network.

  • Developed-market Govt Bond Funds. These funds invest in the bonds issued by countries with developed economies, which usually have a more established history of repayment. These funds are generally considered to have the lowest risk profile of the group.
  • Emerging-market government bond funds. These funds typically invest 65% of assets in bonds issued by countries with smaller, less developed economies. Emerging market funds may have additional or greater yields than other international bond funds.

Funds are flowing out of US government bonds into emerging markets

Funds are pouring out from US government bonds into emerging markets that provide higher yields and returns. Investors have found it necessary to migrate out of GBFs for the sake of keeping abreast of inflation and not remaining caged into a potential net loss on their government bond yield as a result of inflation and a reduction in the buying power of its affected money. In any event, due to the higher interest rates in some of the Sub Saharan Africa emerging markets, it is possible to securely earn up to 3 to 4 times with the emerging market govt., bonds than those in the US.

This is most effective and safely accessibly with an adept local emerging market business facilitator and consultant that will help steer you best into the emerging market government bonds or bond funds. For the gateway from low secure US GBF yields into much higher profits in secure emerging market government bonds, kindly contact our adept team today.

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