Fear Greece, not inflation

Greek_flagInvestors should be more worried about the risk of Greece defaulting on its loans than the potential impact of inflation, according to RWC Partners’ head of absolute return bond strategies, Peter Allwright.
He says government bonds are the only asset class pricing in Greece's default risk, leaving all the remaining asset classes dangerously exposed. Should Greece be forced to restructure its debt, there is a risk that Spain, Portugal and Ireland would also default, leading to more de-leveraging and causing European sovereign banks to rein in lending. “Of most concern to me is that investors are too complacent about the risk of contagion and default in the European bond markets,” said Allwright. “The fact that government bonds are clearly pricing in default and re-profiling to a greater extent than any other asset means someone is wrong and is going to get burnt.” Allwright says it is important to remain liquid and flexible in light of the Greek default risk. His fund has a core allocation to short duration, high-grade bonds supplemented by alpha strategies on the bond and currency markets. ©2011 funds europe

Executive Interviews

INTERVIEW: Put your money where your mouth is

Jun 10, 2016

At Kempen Capital Management, they believe portfolio managers should invest in their own funds. David Stevenson talks to Lars Dijkstra, CIO of the €42 billion manager.

EXECUTIVE INTERVIEW: ‘Volatility is the name of the game’

May 13, 2016

Axa Investment Managers chief executive officer, Andrea Rossi, talks to David Stevenson about bringing all his firm’s subsidiaries under one name and the opportunities that a difficult market...


ROUNDTABLE: Beyond the hype

Oct 13, 2016

The use of smart beta investing continues to grow. Our panel, made up of both providers and users, discusses what the strategy actually means, how it should be used and the kind of pitfalls that may arise when using this innovative investment technique.

MIFID II ROUNDTABLE: Following the direction of travel

Sep 07, 2016

Fund management firms Aberdeen and HSBC Global meet with specialist providers to speak about how the industry is evolving towards MiFID II.