Norway and Sweden favoured by bond buyers

NorwaySwedenMore than 60% of European institutional investors would buy sovereign bonds issued by Norway and Sweden, making them the most popular government bonds in a survey. Commissioned by alternative investment firm Aquila Capital, the survey also found scepticism that government bonds can perform. Nearly half the 255 European institutional investors said they believed sovereign issues would deliver negative returns and a fifth said they would reduce their allocation to government bonds in the next five years. The Nordic countries have long been seen as a safe haven in Europe, though they are hardly cheap. The yield on ten-year Norwegian government debt stands at about 2% while Swedish ten-year government debt has a yield of about 1.4%. German ten-year sovereign bonds, which were the third most popular in the survey, also have a yield of about 1.4%. The results may be due to concerns over the future of the eurozone – Norway and Sweden are outside the eurozone and maintain control of their currencies – something that appeals to investors worried about the future of the single currency. More than half the institutional investors, 54%, said they did not believe the euro will exist in its current form in 2015, though the degree of scepticism varied hugely between countries. Only 8% of UK institutional investors said they expected the euro to survive to 2015 in its current form, compared with 72% of Italian and 60% of French investors. The sceptics mainly believed the single currency would continue to exist but with some countries leaving the union, though a small minority expected the euro to disappear. The least popular bonds in the survey were those issued by Greece, Portugal and Spain. A little under 40% of the investors said they would invest in bonds issued by the United States or UK.

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.