AEGON AM
May 2021 | WealthDFM
Italian bonds are in a
‘sweet spot’ for investment, but it won’t last Investors might want to think again when it comes to Italian bonds as coronavirus turns conventional thinking on Italian debt on its head says Hendrik Tuch, Head of Fixed Income NL at Aegon Asset Management
T
uch cites two reasons for this recent reversal in conventional thinking around Italian bonds, calling the coronavirus crisis a “blessing in disguise” for the country’s finances.
“First, the recent appointment of Italy’s new prime minister, Mario Draghi, and his government bring stability to a historically volatile country,” says Tuch. “As an economist with an impressive resume, Draghi has already gained the confidence of investors. For example, ‘The Draghi effect’ is helping demand for Italian bonds—even allowing the country to cut yields while still selling the full amount of debt it wanted in the most recent new debt offerings after Draghi took office.”
WealthDFM.com
COVID RESCUE PROGRAMS The second reason Tuch explains, is down to the EU’s coronavirus financial rescue programs that have given Italian bonds an added appeal which has yet to wear off. “When the ECB introduced the Pandemic Emergency Purchase Programme (PEPP) this time last year in response to the global pandemic, it was an
As an economist with an impressive resume, Draghi has already gained the confidence of investors
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