- higher expected returns
- this can come from investing in emerging markets (that may have rates of economic growth than more developed markets) or from investing in opportunities that are not available domestically
- Local currency is expected to depreciate
- It may also regard overseas bonds as providing protection against domestic inflation in some circumstances (but unlikely to be as effective as index-linked domestic bonds)
- lower risk
either as a result of increased diversification from domestic markets or when matching liabilities denominated in other currencies However, as will be discussed below, there are a number of additional problems faced when investing in overseas markets.