Two recent multi currency messages about multi currency bonds showed how to get numerous governments to guarantee dollar and euro denominated bonds. They pay 50% to 100% more than local government bonds of the same maturity.
However if you can accept some forex risk, multi currency bonds in emerging currencies can shoot yields into the stratosphere and more than triple what you earn from a US dollar treasury bond.
For example this portfolio of multi currency emerging bonds yields
Egypt EGP Pound 2012 10.81%
Eur Inv Bnk ZAR Rand 2009 11.51%
Hungary HUF Florin 2009 8.49%
RABOBANK RON Leu 2010 10.48%
Gazprom RUB Ruble 2010 7.00%
Eur Inv Bnk TRY Lira 2010 17.25%
Brazil BRL Cruzero 2016 11.13%
Mexico MXN Peso 2009 8.24%
The average yield is 10.61% and this portfolio is guaranteed by four governments and four top quality (still) borrowers.
We are reviewing how to enhance this profit even more with multi currency loans in our multi currency portfolios course. You can read this and learn how to buy these bonds as a multi currency portfolios course subscriber.
The financial crisis has hit the international capital markets in earnest. Emerging markets have turned out to be very resistant to the crisis compared with other asset classes.
See in tomorrow’s message why emerging market equities have been safer than major markets this year and may recover better as well.
Until then, good global investing to you.
Merri and I love our lives in North Carolina’s mountains but after autumn’s gold, the weather looks like this! Here we were one year at the entrance of our farm.
We won’t make that mistake again! Instead we move to Ecuador’s Pacific coast and Cotacachi, enjoying weather and views like this one shot of sunrise in Cotacachi from our bedroom.
Tomorrow’s message looks at more Ecuador pictures and the benefits multi currency emerging equities.
Until then, good multi currency investing.
Our Oct 14-18 Ecuador Import Export Course has two spaces left.
Learn this November more about Ecuador and emerging bonds. Join Merri, me, Steve, Kjetil Haugan and Peter Conradsen of Jyske Global Asset Management in Cotacachi Ecuador. We’ll review economic conditions, Ecuador real estate, my entire portfolio and investing and business ideas for the months ahead.
Nov 7-9 2008 International Investing and Business Made EZ Ecuador
See the wonderful balconies in the Primavera condos at for sale at $46,000 in Cotacachi.
Nov 10-11 Imbabura Real Estate tour
Then travel to the coast. See the Vistazul sunset on Ecuador’s Pacific.
November 12-15, 2008 Ecuador Coastal Real Estate Tour; Quito Real Estate Tour