Africa Bond

Africa bond mutual funds and ETFs invest the majority of their assets... Africa bond mutual funds and ETFs invest the majority of their assets in government and corporate debt of countries in Africa. This includes nations such as South Africa, Nigeria, Zambia, and Algeria. These funds can be actively or passively managed and may seek to track or outperform a particular benchmark. They may hedge foreign currency risk, or elect to leave themselves exposed to fluctuations in other nations’ currencies. Depending on their mandate, an African bond mutual fund or ETF may focus on investment-grade bonds, high-yield (a.k.a. junk bonds), or a mix of credit quality. The indebtedness of African countries has increased significantly in recent years. Private bondholders are the largest creditors, but China is also now a big lender to many African nations. Investors purchase Africa bond mutual funds and ETFs to get both capital growth and income. These funds can vary significantly in terms of risk. For example, a fund focused on the short-term government debt of an oil exporter is likely to be more conservative than a fund that invests in long-term government bonds of oil-importing countries with high debt-to-GDP ratios. Last Updated: 07/26/2024 View more View less

Africa bond mutual funds and ETFs invest the majority of their assets in government and corporate debt of countries in Africa. This includes nations such as South Africa, Nigeria, Zambia, and Algeria. These... Africa bond mutual funds and ETFs invest the majority of their assets in government and corporate debt of countries in Africa. This includes nations such as South Africa, Nigeria, Zambia, and Algeria. These funds can be actively or passively managed and may seek to track or outperform a particular benchmark. They may hedge foreign currency risk, or elect to leave themselves exposed to fluctuations in other nations’ currencies. Depending on their mandate, an African bond mutual fund or ETF may focus on investment-grade bonds, high-yield (a.k.a. junk bonds), or a mix of credit quality. The indebtedness of African countries has increased significantly in recent years. Private bondholders are the largest creditors, but China is also now a big lender to many African nations. Investors purchase Africa bond mutual funds and ETFs to get both capital growth and income. These funds can vary significantly in terms of risk. For example, a fund focused on the short-term government debt of an oil exporter is likely to be more conservative than a fund that invests in long-term government bonds of oil-importing countries with high debt-to-GDP ratios. Last Updated: 07/26/2024 View more View less