Bond fund managers take dim view on Europe

Prominent bond fund managers paint a gloomy picture of Western government bonds.

Their negativity about sovereign debt is outdone only in their views of the bond issue coming from Machester United. Theo Zemek, manager of the Axa Sterling Corporate Bond fund, says sovereign debt faces "unprecedented pressure and is not risk-free." In Europe, Greece, Ireland, Spain and Portugal face challenges while lacking some of the three important tools - namely raising taxes, and inflation by currency depreciation or by straightforward inflation - needed to "emerge from their debt crisis". "Government bonds are going through a torrid time, and in the long term interest rates...