3 Funds Offering Extra Yield From Foreign Bonds

Central bank actions have made overseas debt more appealing, but watch out for the effect of exchange rates.

Shooting for extra income? It can pay to venture offshore. Yields on bonds issued by foreign governments and companies often beat comparable U.S. rates. Moreover, central banks in Europe and Japan recently cut interest rates, while the Federal Reserve has embarked, gingerly, on the opposite path. Such divergences can make foreign bonds a better bet than U.S. bonds, which stand to lose value if rates continue to increase at home.

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Daren Fonda
Senior Associate Editor, Kiplinger's Personal Finance
Daren joined Kiplinger in July 2015 after spending more than 20 years in New York City as a business and financial writer. He spent seven years at Time magazine and joined SmartMoney in 2007, where he wrote about investing and contributed car reviews to the magazine. Daren also worked as a writer in the fund industry for Janus Capital and Fidelity Investments and has been licensed as a Series 7 securities representative.