Those Who Invested In USD Turned The High Interest Into An Opportunity!

In the financial markets where the risk premium has increased to 600 levels, the money has shifted to different instruments in the last 1.5 years.

Those who invested in USD turned the high interest into an opportunity. While the risk premium in financial markets increased to the level of 600 by 2020, money turned to different commodity preferences. Investors, who keep their savings in US dollars, have concentrated on taking advantage of the falling eurobond prices while the risk premium is increasing, unlike traditional investors. As a result, the eurobond stock of real persons reached the level of 3.5 billion dollars from 1.9 billion dollars in the first months of 2020. While the coronavirus epidemic hit the financial markets, investors diverted the money they hold to different commodity preferences in 2020, when the epidemic increased its effectiveness. As stated in the article by Zeynep Aktaş from Milliyet, the eurobond accounts of natural persons in Turkey have increased by 81 percent since 2020, while the eurobond stock of legal entities has increased by 30 percent. Aktaş listed the risks and opportunities in his article as follows: 1 - The most important risk of buying Eurobonds is the country risk premium CDS. The increase in CDS rates causes the eurobond prices to decline. Eurobond prices get cheaper in times when Turkey's risk premium is extremely high. Although Eurobonds are an alternative, they need to be followed closely. It is worth remembering that it may not be an advantage for those who do not follow regularly. 2 - As interest rates increase in the USA, money is shifting from countries with high risk premiums to safe harbors. For this reason, possible interest rate increases in developed countries draw attention as the second important factor. 3 - Buying Eurobonds is advantageous for those whose money is constantly invested in US dollars. The advantage provided by the Eurobond is that it provides higher interest rates compared to foreign exchange rates. 4 - The best purchase for Eurobonds is prices falling sharply in an environment of high pessimism. 5 - In long-term eurobonds, the money will be tied for long term. There may be very strong fluctuations in financial markets on a global basis. Therefore, eurobonds may not always be attractive to investors. 6 - Banks' buying and selling spreads are high, so it is difficult to win with short-term buy and sell. 7 - Companies that pay high interest rates should be careful while buying eurobonds. An adverse event originating from the company may result in the loss of the tied money.

What Did Eurobond Funds Provide?

Eurobond funds have provided investors with a return of between 7 and 14 percent since the beginning of 2021. According to the data announced by Fonbul.com, the average return of 10 Eurobond funds was recorded as 11.07 percent. According to the returns achieved since 2019, eurobond funds yielded between 56 and 72 percent. Is Asset Management PY Eurobond Debt Instruments (Foreign Exchange) Fund, which was declared as 14.23 percent, was the eurobond fund that has provided the highest return since the beginning of the year. This fund was followed by Yapı Kredi Portfolio PY Debt Instruments (Foreign Exchange) Special Fund with a yield of 13.98 percent. Among the fund categories, eurobond funds are known as the highest-yielding fund category since the beginning of the year.