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Currency Funds Are Betting On Recovery After a Dismal Decade

  • Bond losses, costly stocks may benefit foreign-exchange funds
  • Passive currency hedging has surged since 2008 crisis: Record
Tokyo Shoppers And Stores Ahead of CPI Announcement
Photographer: Tomohiro Ohsumi/Bloomberg

After a dismal decade, active currency managers see light at the end of the tunnel.

As a decade of ultra-accommodative monetary policy after the 2008 crisis now appears to be nearing its end, funds that invest in currencies as an asset class are hopeful of a rebound. Specialist firm Record Plc as well as multi-asset funds Insight Investment Management and Russell Investments are among those betting on higher volatility -- a prerequisite for improving returns and ending outflows -- and a return of the carry trade.