Europe

European banks and finance officials are discussing a proposal to replace existing Greek debt with a different type of bond to get around ratings agencies' reservations about a planned rollover, Reuters reports.

SHOULD GREECE BE ALLOWED TO GO BUST?

Newton's Paul Brain said the possibility of Greece defaulting on its debt has tripled since a bailout was first agreed, resulting in a higher risk the country could leave the euro by the end of this year.

Announcing a haircut on Greek bond holdings would help restore a positive mood to bond markets, which have largely priced in such a move, said DWS Investments' CIO Asoka Wöhrmann.

Newton's Raj Shant has handed over the European Higher Income Fund to his colleague Fred Moore.

ON EUROPE

The EU and IMF have reached a deal on Greece which should prevent a default, but will involve a new round of austerity measures for the beleaguered nation.

Henderson Global Investors has increased its holding in rival Liontrust Asset Management, taking its position in the asset manager to more than 11%.

Tension between the European Central Bank and the German government has intensified as Jean-Claude Trichet hit back at the German finance minister's claims Greek government bondholders should contribute to a new aid programme.

‘If in doubt, delegate' seems to be the mantra of a growing number of investors this year, as asset allocation portfolios giving managers discretion to shift capital between markets are a popular choice.