T. Rowe Price Associates Inc.'s International Bond Fund is showing a little wear and tear with the dollar's sharp rise. The fund returned a negative 3.2 percent in the past three months.
"That's the nature of the game, especially in a bond fund," said Steven E. Norwitz, a company spokesman.
"Anybody investing in foreign funds . . . really should not be too influenced by short-term swings in the dollar."
A stronger U.S. currency means a reduction in the dollar value of foreign holdings, and the dollar has been climbing. It reached 99 yen at the end of August, 104.55 yen Tuesday and closed yesterday at 100. The rise spurred $3 million in net redemptions in the International Bond Fund in late July.
"We wouldn't even blink an eye at that," Mr. Norwitz said.
Despite the dollar's rise, the fund, which invests primarily in bonds issued by such foreign governments as Japan, France, Germany and England, had net cash inflows of $4.3 million in July, $13 million in August, and $16 million in September.
It also returned 16.8 percent for the first six months of the year, and 12.8 percent from January to August.