Bulgaria Golden Visa Fund Investing in Bonds
Last Updated on April 26, 2026 by Bulgarian Citizenship Team
Why Bonds Are Always Underestimated
Bonds have always been seen as a low-risk, low-return, and frankly boring asset. However, history shows a different picture. Bonds have performed quite well over time, and in certain cases, they have even outperformed the S&P 500.
Still, many well-known financial voices tend to downplay bonds. The reason is simple — bonds are harder to speculate on, and therefore less attractive for large international fund managers who rely on higher turnover and volatility.
Bond Market Situation Driven by Geopolitics
Representing Bulgaria AIF Fund, the first Bulgaria Golden Visa fund, we are primarily focused on bonds. The reasoning is straightforward: bonds are generally considered capital-preserving and less volatile compared to equities.
At the same time, investing in the Bulgarian Stock Exchange is not always the most efficient approach, given its illiquidity and high concentration (despite being larger than the Portuguese stock exchange). We do encourage investing in BSE, but only for those who understand the market well — not for random allocations.
For those following bond markets closely, the recent trend is clear. Government bond prices have declined by around 5% across the board. This is not country-specific — it applies to Bulgaria, Greece, Turkey, Romania, Hungary, and Italy. These are precisely the markets that tend to outperform bank deposits and protect against inflation over time.
What This Means for Investors
The signal is quite clear — this is a good entry point.
When bond prices fall, yields increase. In simple terms, you are buying bonds at a discount.
S&P 500 vs Government Bonds
A practical example illustrates the point.
We came across a Turkish government bond — Turkey, Republic 11.875% 2030, ISIN: US900123AL40. It was issued at par (100). Over the last 25 years, the S&P 500 has delivered around 9% annually. This bond, however, offers 11.875% annually in USD.
This is a plain government bond, accessible to private investors, yet it outperforms the S&P 500 by nearly 3% annually.
Even more interesting — the bond price dropped to around 75 in 2021. At that level, the effective yield would have been significantly higher than 11.875%.
Turkey is rated around BB- (speculative), yet its bonds have delivered strong returns. Historically, Turkey has serviced its debt over the past decades, which adds another layer to the risk-return discussion.
Timing Is Everything
Like any asset class, bonds are about timing.
Some assets are structurally strong — as in the Turkish example — where even buying at par can deliver solid long-term returns. However, the real opportunity comes when markets overreact and prices drop significantly.
Few investors would have believed that a Turkish bond could survive a full 30-year cycle. Today, it is approaching maturity with only a few years remaining.
Bulgaria AIF Fund Capital Preservation Perspective
Many investors are looking for international diversification. However, the Bulgaria Golden Visa framework is also about strengthening the local investment ecosystem, developing the capital market, and supporting the domestic economy.
Bulgaria does not offer a large number of opportunities — but it does not need to. What matters is identifying the right ones.
With patience, there are always opportunities that can outperform the more popular and crowded investment strategies.
