Not bound by Bunds: Why peripheral bonds could be key to unlocking alpha

In Short

In turbulent times, active management is crucial. Despite the high levels of volatility in European sovereign bonds year-to-date arising from Russian invasion of Ukraine and higher ECB interest rates, the Generali Investments SICAV(GIS) Euro Bond sub-fund has outperformed the benchmark. This is thanks to a highly active approach to duration management and diversified exposure that includes a significant allocation to peripheral European countries as well as to inflation-linked bonds.

In this article, we explain

  • How Mauro Valle nimbly adjusted portfolio duration in response to major market events in 2022
  • Why peripheral European government bonds from Italy and Greece present pockets of value
  • How diversified European government bond exposure can provide a hedge against volatility and offer defensive, risk-adjusted returns
  • How the GIS Euro Bond sub-fund has outperformed versus the benchmark throughout a negative-yielding environment

 

Mauro Valle_GIS Euro Bond.pdf
Picture

© Generali Investments, all rights reserved. This website is provided by Generali Investments Luxembourg S.A. (Generali Investments) and is considered as a marketing communication and financial promotion related its products and services. This website may contain information related to the activity of the following companies: Generali Asset Management S.p.A. Società di gestione del risparmio, Infranity, Sycomore Asset Management, Aperture Investors LLC (including Aperture Investors UK Ltd), Plenisfer Investments S.p.A. Società di gestione del risparmio, Lumyna Investments Limited, Sosteneo S.p.A. Società di gestione del risparmio, Generali Real Estate S.p.A. Società di gestione del risparmio, Conning* and among its subsidiaries Global Evolution Asset Management A/S - including Global Evolution USA, LLC and Global Evolution Fund Management Singapore Pte. Ltd - Octagon Credit Investors, LLC, Pearlmark Real Estate, LLC as well as Generali Investments CEE. *Includes Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc., Goodwin Capital Advisers, Inc. (collectively, “Conning”).