European Bond Market: What are You Buying?

France and Italy make up approximately half of the entire European government bond universe, while Germany only makes up 18%

Dan Kemp 27 March, 2017 | 2:13PM
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With the Dutch elections behind us, there are still a series of potential catalysts for market chaos in the pipeline for 2017. We have the French elections in May, the German election set for approximately October and a series of debt tranches due for maturity in between.

While we do not want to fall into the trap of predicting the outcomes from these events, it is extremely important as contrarian investors to know your exposures. This is no more important than in European bond markets, where we must acknowledge a large range of potential scenarios over a long-term horizon, where a European Union break-up cannot be disregarded.

As risk savvy investors, awareness is key. We do not want to make an active decision between Europe and global equivalents without knowing what we would be holding and in what size.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Dan Kemp

Dan Kemp  is Chief Investment Officer, Morningstar Investment Management EMEA