EU leaders have agreed a further €109bn (£96bn) bailout for Greece, one-third of which will come from private sector bondholders.
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".
European leaders last night bowed to the inevitable and conceded Greece is likely to default on its massive debt burden, which would be a first among the 17 countries using the euro, according to reports.
Spain is facing the same danger of default as Greece, Ireland and Portugal, said M&G's Mike Riddell, following the lacklustre Spanish government bond auction yesterday.
The euro crisis is following a predictable path. The bills have increased greatly, and are being passed around in the hope the problems will go away.
The eyes of the world's investors will be on the European financial markets this morning after a day in which eurozone debt fears saw the FTSE suffer its heaviest one-day fall in two months.
Yields on Greek 10-year government bonds have rocketed to record levels as fears rise the nation could default on its debt repayments, the FT reports.
Markets across Europe fell at the start of trading as an earthquake measuring 5.1 on the Richter scale hit Spain and commodities were heavily sold off in the US.
Spain's €3.4bn sale of long-term debt has dampened fears the eurozone country could be next in line to need a bailout.
Back in July 2000 following the Asian crises, the IMF produced a report entitled "Currency and Banking Crises: The Early Warnings of Distress". The study looked at 102 financial episodes in 20 countries.