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Since there has been a little discussion recently concerning investing in overseas bonds, I thought some may be interested in viewing some research that Vanguard has completed on this topic. I happened to come across this when I called them to inquire in regards to another matter. There research covers several pages about the reward vs the currency risk involved with global bonds and modern portfolio theory. Their conclusion is that foreign bonds is not necessarily a slam dunk for everybody and could add more volatility to a portfolio than the reward may justify.

This link will take you to a page with the abreviated information from their study. Those that like research may want to read their PDF file "Global fixed income: considerations for U.S. investors" which can be accessed by going to the above page then clicking on the link "Vanguard Research" located halfway into the article. FWIW
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