Specter of Worse Emerging-Market Rout Drives Loomis Fund to Sell
- Fund has exited positions in South African and Mexican debt
- Selloff risk may be worse than 2013 due to leverage: DiCenso
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A Loomis, Sayles & Co. fund has sold the bulk of its emerging-market bonds, warning that a strengthening dollar and rising Treasury yields make the securities increasingly risky to hold.
Boston-based portfolio manager Andrea DiCenso sold local-currency government debt from South Africa to Mexico in the past week when inflation jitters catapulted U.S. yields to their highest level in a year. The positioning reflects a growing caution among investors about the risk of another bond selloff on the scale of the 2013 taper tantrum.