Running without currency insurance

Foreign investors flock to U.S. corporate bond market for yield

FOREIGNER INVESTORS UNDETERRED
Despite the change in Fed outlook, dollar hedges have remained high, although they’re off last year’s peaks, stemming from higher dollar borrowing costs in the money markets. That, however, has not deterred foreign investors from buying U.S. corporate paper.
“The U.S. has been the shining star in the global economy and this is where you’re seeing very strong growth and very strong fiscal support over the last year,” said Robert Brauns, portfolio manager for multi-strategy fixed income at BNP Paribas Asset Management in New York.
“I think that has enticed investors to put some more money to work in the U.S.,” he added.
At the same time, foreign investors, rather than face expensive hedging costs, have opted not to hedge their currency risks at all and this has worked to their advantage because the dollar has strengthened. The investor does not only get the yield from the fixed income paper, but the currency gain as well.

The USA is the star performer, so they skip the currency insurance and go straight for corporate yield.   If we have a dollar crash they are screwed.