With U.S. policy uncertainty and related market volatility likely to persist, it’s essential for investors to diversify their portfolios away from the U.S. This can be achieved through increased investment in global fixed income strategies. Crucially, global fixed income can reduce exposure to both volatile U.S. interest rates, as well as U.S. equities.
Approaching global fixed income on a currency hedged basis can be particularly useful. A currency hedged approach can help mitigate currency volatility while still enabling portfolios to tap into the diversification benefits of global fixed income.
Beyond geographical diversification, several other key factors currently work in favor of global fixed income. One of the most significant dynamics is the trajectory of central banks outside of the U.S.
Many central banks around the world are expected to trim interest rates. This includes the European Central Bank, Bank of Canada, and the Reserve Bank of Australia, among others. Central banks are in different stages of their respective rate-cutting cycles. By taking on sovereign debt exposure from a variety of different countries, advisors can limit risk from the performance of an individual country while broadening their portfolios’ opportunity set for building yield.
Notably, a number of major global central banks are expected to cut rates more aggressively than the Fed later this year. Falling rates drive bond prices higher, meaning investors who move into global fixed income now may see capital appreciation. As for corporate bonds, a global fixed income strategy lets investors access a broader opportunity set as well. For instance, multi-national companies may opt to issue highly similar bonds across different countries or markets. An astute global fixed income manager can navigate the geopolitical landscape to find the bonds with the most opportune price and risk profile.
While opportunity may be knocking for global fixed income exposure, navigating individual securities within each country can prove difficult. As such, advisors might instead wish to turn to well-established funds managed by experienced portfolio teams.
How DHGAX Approaches Global Fixed Income
One global fixed income strategy that stands out is the BNY Global Fixed Income Fund (DHGAX). This BNY fund uses global fixed income securities to generate total return while preserving principal.
Under the hood of DHGAX’s portfolio is a broad selection of fixed income securities around the globe. However, the fund still stays deeply engaged with the U.S. fixed income market as well. As of March 31, 2025, about 56% of DHGAX’s net assets were allocated to U.S. bonds. With stronger U.S. exposure than other global fixed income strategies on the market, DHGAX gets more opportunity to tap into robust U.S. credit markets.
This portfolio split can serve very well for advisors and investors looking to take on international fixed income opportunities. While the U.S. side of the fund can serve as a familiar ballast, the other half of the portfolio invests in fixed income opportunities in countries such as France, the U.K., China, and New Zealand.
As part of DHGAX’s broad opportunity set, the fund takes fixed securities from a variety of sectors and maturities. This gives the fund a more diverse set of yield opportunities compared to funds with stricter sector and maturity regiments.
Notably, DHGAX can also invest up to 25% of its net assets into securities tied to emerging markets. By looking beyond developed markets, the fund’s emerging market exposure can help widen its overall return profile.
With more than two decades of experience on the market, this BNY strategy has continued to resonate with investors today. As of April 17, 2025, the fund holds nearly $3.2 billion in assets under management.
For more news, information, and analysis, visit our Portfolio Strategies Content Hub.
