Aussie Bonds a Smart Alternative to Europe Says Loomis Sayles Manager

Australia is a good alternative to the negative yields in Europe, but it's better to hedge the currency back to dollars, said Lynda Schweitzer, portfolio manager for the Loomis Sayles Global Bond Fund. Schweitzer added that the Reserve Bank of Australia will cut rates a couple more times due to the slowing economy which is good for government bonds. She said it is hard to find value in emerging market bonds now due to the strong dollar and that is forcing her to be selective. Finally, Schweitzer said she was underweight energy bonds last year, but raised the fund's exposure to energy names in the first quarter, specifically some of the low cost providers that won’t get hit any further if oil goes down further.