Bond investments

[Baptiste Wicht]

Dumb question from my side: why should investors living in Switzerland only invest in Swiss bonds? (this is the only discussion I see here).

Why not invest in US bonds, or bonds from other countries?

For me (and not everybody agrees), it's because of currency. Bonds are to reduce the volatility of your portfolio. If you get US bonds, they are in USD, so you introduce a new form of risk with currency risk. So, for me, CHF bonds make much more sense.

 

[gaijin]

Just to expand the post of @Baptiste Wicht . For me, the complexity of bonds are inversely proportional to their return. Investing in bonds from other countries introduces the discussion (and decisions) about their credit rating, making the selection of 'good' bond investments even harder and more complex.

Maybe it's just my fading memory, but don't other countries have bonds in CHF? I vaguely remember some countries of Eastern Europe giving out loans (and bonds?) in CHF, since it's considered to be a strong and stable currency. This would not be a currency risk but a pure creditor risk.

 

[Baptiste Wicht]

Maybe it's just my fading memory, but don't other countries have bonds in CHF? I vaguely remember some countries of Eastern Europe giving out loans (and bonds?) in CHF, since it's considered to be a strong and stable currency. This would not be a currency risk but a pure creditor risk.

Interesting, I did not know that. Looking into it, there seem to be multiple foreign issuers of CHF bonds.
Multiple Swiss banks even funds with "CHF Foreign Bonds".