been looking at different international bond funds lately and found something interesting. seems like a lot of people are trying to diversify beyond us markets right now, and bonds are one way to do it.

so there's this vanguard emerging markets government bond etf (vwob) that's been performing pretty well recently compared to other popular bond funds. the fund holds government debt from countries like saudi arabia, mexico, turkey, indonesia - basically emerging economies that are still developing. it's got around 902 bonds in there with a pretty low expense ratio at 0.15%.

here's the thing though - if you're looking for the best international bond funds to add to your portfolio, you need to understand what you're actually getting into. these emerging market bonds pay higher yields, which sounds great, but they come with more risk. about 41% of the holdings in vwob have speculative-grade credit ratings (bb or lower), which means these countries might struggle to repay if things go wrong. compare that to traditional us bond funds where most holdings are either us government bonds or investment-grade stuff.

if you want exposure to international bond funds but don't want to take as much risk, there's the vanguard total international bond etf (bndx) which is more diversified across 6,600+ bonds globally. only about 7.5% is in emerging markets, so you get some of that higher yield potential without putting all your eggs in the emerging market basket.

the real question is whether you can actually handle the volatility. best international bond funds for you depends on how much risk you're comfortable with and your overall portfolio strategy. emerging market bonds might give you better returns, but they can swing pretty hard in the wrong direction too.