How to invest in foreign bonds from Poland — guide
How to buy American and European bonds from Poland? Practical guide to foreign bonds — bond ETFs, brokers and taxes.
9 min czytaniaWhy consider foreign bonds?
Polish treasury bonds (EDO, COI, TOS) are a solid base, but have limitations — they're denominated exclusively in PLN and offer limited diversification. Foreign bonds provide access to:
- stable economies (USA, Germany, France),
- different currencies (USD, EUR) — which provides natural hedging,
- broader spectrum of maturities and interest rates.
Ways to invest in foreign bonds from Poland
1. Bond ETFs — simplest way
Bond ETFs are exchange-traded funds that buy hundreds or thousands of bonds. You buy them like regular stocks through a brokerage account.
Popular bond ETFs available from Poland:
| ETF | Ticker | What it contains | TER |
|---|---|---|---|
| iShares Core US Aggregate Bond | IUSB | US bonds (government + corporate) | 0.06% |
| iShares Core € Govt Bond | IEGA | Eurozone government bonds | 0.09% |
| Vanguard USD Treasury Bond | VDTE | US Treasuries | 0.07% |
| iShares Global Aggregate Bond (EUR hedged) | AGGH | Global bonds with currency hedging | 0.10% |
2. Direct bond purchase through foreign broker
Brokers like Interactive Brokers enable direct purchase of US government bonds (US Treasuries) and European bonds. However, this requires:
- larger initial capital (US bonds have $1,000 nominal value),
- knowledge of bond market mechanics,
- independent tax settlements.
3. Bond mutual funds (TFI)
Polish TFIs offer funds investing in foreign bonds, e.g., global bond funds. They're convenient but have higher fees (TER 0.5–1.5%) compared to ETFs.
Which broker to buy through?
| Broker | Bond ETFs | Direct bonds | Account currency |
|---|---|---|---|
| XTB | ✅ | ❌ | PLN, EUR, USD |
| Bossa (mBank) | ✅ | ❌ | PLN |
| Interactive Brokers | ✅ | ✅ | Multi-currency |
| Degiro | ✅ | ❌ | EUR |
What to pay attention to?
Currency risk
Buying ETFs in USD or EUR exposes you to currency risk. If złoty strengthens, your investment loses value in PLN terms — even if ETF price doesn't change.
Solution: Currency-hedged ETFs (e.g., AGGH) eliminate this risk but have slightly higher costs.
Taxes
- Belka tax (19%) — on capital gains and interest, same as with Polish securities.
- Currency settlement — you must convert gains to PLN at NBP rate from day preceding transaction.
- No double taxation — ETFs registered in Ireland (ISIN starting with IE) benefit from favorable tax treaties.
Duration — interest rate sensitivity
The longer the maturity of bonds in the ETF, the greater sensitivity to interest rate changes. When rates rise, bond prices fall.
- Short bonds (1–3 years) — low volatility, lower profit.
- Long bonds (10–30 years) — high volatility, higher potential profit.
Example bond allocation
For investor seeking stability:
- 50% — iShares Core € Govt Bond (IEGA) — European bonds,
- 30% — Vanguard USD Treasury Bond (VDTE) — US bonds,
- 20% — Polish inflation-indexed bonds (EDO/COI).
Such portfolio provides currency and geographical diversification with moderate risk.
How Freenance can help?
Freenance allows tracking bond ETFs alongside stocks, cryptocurrencies and cash in one dashboard. You see:
- what percentage of portfolio bonds constitute,
- how their value changes in PLN,
- whether your allocation matches investment goals.
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