Fixed income
Sovereign bonds
Sovereign bonds are debt securities issued by national governments to finance public spending and manage national debt. They are considered relatively low-risk investments, especially when issued by countries with strong and stable economies. These bonds are often viewed as suitable for investors seeking capital preservation and steady income, as governments are typically less likely to default on their debt compared to private entities.
Sovereign bonds can be issued in the country's own currency or a foreign currency, impacting their risk profile. Ratings agencies like Moody’s, Standard & Poor’s (S&P), and Fitch assess the creditworthiness of sovereign bonds based on the issuing country's economic health, political stability, and fiscal policies.