Managers eye Italian bonds as 'investors are too bearish'

'Italexit risks are overstated'

Jayna Rana
clock • 3 min read

Fixed income managers are split on whether value can be found in the Italian bond market as political uncertainty in the country continues to weigh on investor sentiment.

The spread between Italian bonds and German bunds widened materially at the end of 2018, with markets pricing in an elevated risk for an 'Italexit' following the installation of a populist government comprising Lega Nord and the Five Star Movement. As spreads moved more than 300 basis points, a 30% likelihood of Italy leaving the European Union on a two-to-three-year view was also priced in, according to Mark Dowding, co-head of developed markets at BlueBay Asset Management. However, Dowding, who has increased the exposure to Italian bonds in the firm's €107m High Yield Corporate Bond...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Bonds

Partner Insight: Moving from cash to corporate bonds ahead of cutting-cycles

Partner Insight: Moving from cash to corporate bonds ahead of cutting-cycles

Fidelity International

Ben Deane, Investment Director, Fixed Income - Fidelity International
clock 19 March 2024 • 13 min read
JP Morgan AM to wind up Sterling Bond fund as assets dwindle

JP Morgan AM to wind up Sterling Bond fund as assets dwindle

Fund size of £29m

clock 18 March 2024 • 1 min read
JP Morgan AM's Iain Stealey: Debt maturity wall is not to be feared

JP Morgan AM's Iain Stealey: Debt maturity wall is not to be feared

Surge in corporate bond issuance

Valeria Martinez
clock 15 March 2024 • 2 min read
Trustpilot