Read and Causer bet on Spanish and Italian bonds

Invesco Perpetual's Paul Causer and Paul Read have allocated nearly a quarter of their £398m Tactical Bond fund to Spanish and Italian bonds in the view the countries are "too big to fail".

Causer and Read said they are exploiting a “short-term tactical opportunity” by building up a 13.5% position in Italian government bonds and 9.2% in Spanish – taking overall exposure to 22.7%. Half the weightings are in short-dated paper, which is set to mature in 2013, while the remaining 12% is split between 10-year Italian and 10-year Spanish bonds. The managers have been adding to the positions since the start of May, taking 15% of cash off the table, as they are looking to profit from weak sentiment in the eurozone. The managers do not foresee a default in either Spain or Ital...