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A $100 Billion Bond Fund Says Resurgent Dollar Set for Reversal

May 18, 2018 / Cecile Gutscher

Jim Schaeffer says a resurgent dollar that’s crushed returns for local debt from developing nations is due for a turnaround. The deputy chief investment officer at Aegon Asset Management is sticking with his unhedged overweight position in local-currency bonds even as losses pile up. Aegon oversees $103 billion of fixed-income assets, including $4 billion dedicated to emerging markets. “The strength in the dollar probably surprised us a little bit,” Schaeffer, who is based in Chicago, said in an interview. “When the dollar is doing well against major currencies the weight is on emerging markets. We see this as relatively transitory and for the dollar to weaken against major currencies through 2018.”