BlackRock Euro-Bond Head Snubs U.S. Colleagues' Tips on Hedging

BlackRock Inc.’s head of euro fixed-income is ignoring recommendations from U.S. colleagues due to the surging cost of dollar hedging.

Short-term currency hedges now cost about 4 percent for euro investors, which can more than offset the higher yields found in the dollar market, according to London-based Michael Krautzberger, who oversees around 90 billion euros ($102 billion) of fixed income assets at the world’s biggest money manager. That means dollar-bond tips are no longer as appealing.