The disadvantages of international bonds include: - Foreign exchange risk: The value of the currency in which the bond is denominated may change over time, making it more expensive to repay principal and interest if you need to convert back into your home currency. - Currency risk: The value of your home currency may also decline, meaning you will have to pay more when you redeem your funds in your home currency than when you bought them originally.
International bonds have a lot of disadvantages which include the following:
- Risk of default
- Tax issues
- Difficulty in managing international investments
- High transaction costs
- Difficulty in repatriating capital at a particular time
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