International debt funds: Is investing worthwhile?

The international debt market has seen quite a shake-up in the past year, largely driven by global interest rate hikes since 2022. This has resulted in a surge in US Treasury bond yields, reaching levels not seen since 2007, marking a 16-year high. Launch of three FoFs In response to these developments, three fund of funds (FoFs) have been launched in the last eight months in this space. These include Bandhan US Treasury Bond 0-1 Year FoF, Aditya Birla Sun Life US Treasury 1-3 Year Bond ETFs FoF, and Aditya Birla Sun Life US Treasury 3-10 Year Bond ETFs FoF. They have amassed a total of around Rs 341 crore to date. The inaugural fund, Bandhan's FoF, launched in March 2023, focuses on investing in US Treasury bonds maturing within one year. The subsequent offerings from Aditya Birla invest in ETFs with underlying securities as US Treasury bonds, cov