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The month of August has been characterized by a poor trend of the main international financial markets. Some mutual funds, however, have pulled off anyway positive returns. Among these is Eurizon EasyFund Bond GBP. This fund has scored a performance of 3,55% in August, benefitting from the British pound’s revaluation against the euro. Fund managers Luigi Fallanca and Matteo Magnani explain that the positive return is certainly due to the currency effect, but it has also been boosted by “the movement of the British yield curve which has undercome a flattening in its long part (10-30 years), that is the segment where the majority of bonds issued by the treasury is concentrated”. “For the next months – they conclude – we expect the scenario won’t be subject to substantial variations. The UK economy could undergo a slowdown and generate a descent of the inflation to levels that are more consistent with the BoE’s policy. We therefore mean to keep the current positioning in order to take advantage of the expected increase of British government bonds, despite the low carry offered by these instruments”.
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