Pimco favors short positions in emerging-market currencies versus the dollar, underweights in developing-market credits and long positions in select local rates where currencies and yields have adjusted significantly and are pricing in large policy rate hikes over the next year, Gomez said. A short position is a bet a currency or security will decline in value.

Pimco’s Foreign Bond Fund has lost 0.13 percent this year, still outperforming 73 percent of its peers as of Oct. 7, according to data compiled by Bloomberg.

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