At least seven global bond funds revealed top 10 holdings in peripheral eurozone debt at the end of September, according to Trustnet, as Ireland’s financial woes accelerated towards its recent bailout. Italy and Spain dominated the holdings, rather than Greece and Ireland, which have received a bailout from the IMF and the European Union - in Ireland’s case, the European Financial Stability Fund.
Managers also avoided Portugal, which has a deficit of almost 10 per cent of GDP and is struggling to pass budget cuts. Large portfolios which hold Spanish or Italian debt include the £753m Newton International Bond, the £423m F&C Global Bond, the £339.2m Threadneedle Global Bond, the £337m Old Mutual Global Strategic Bond and the £199m Henderson Overseas Bond funds.
Overall, Paul Brain, the manager of the Newton International Bond fund, says Spain is not growing fast enough to stomach the budget cuts required. He has sold out of Spanish debt entirely.
Dave Chappell and Martin Harvey, who co-manage the Threadneedle Global Bond fund, say the Italian situation looks somewhat superior. Like Brain, they have stuck with their holdings in the country.Full article here: Money Marketing on Global managers
Personally, It looks as if current Irish bank debt might be a better home (NOT SUB) as they will be receiving bailout funds (while there still are some) and we should see a "grandfathering" of the risk sharing (bail-in) that is being bantered about everywhere. If this is the case, IRE might be worth a look.
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