Get ahead with Eurizon's bond strategies
Investing in Eurizon bond funds to exploit the interest
rate path
In any case, there are no expectations for a resumption of central bank rate hikes, but only a postponement of the start of the rate cut cycle and a reduction of its overall size. Also, the longer the central bank keep rates at their current levels, the longer investors will keep cashing in substantial short and medium term coupons in excess of inflation.
Furthermore, the longer maturities should mostly be considered as insurance against the risk of a future macro slowdown. An insurance than pays the policy underwriter (and not vice versa) in the form of positive real rates.
At the current spread level, euro area countries, particularly peripheral ones including Italy, should benefit from the phase of declining interest rates, as higher-debt countries are expected to bear lower debt burdens. Therefore, the view on instruments such as BTPs is positive because the yield curve is still positively sloped. Consequently, long-term yields are higher than short-term ones. Additionally, volatility in Eurozone is decreasing, improving the risk-adjusted volatility and expected return. Furthermore, investors, especially international ones, are currently underweight compared to previous years.
The view is constructive and prospects remain favorable also for credit, where spreads still have room for further decline compared to typical end-of-cycle levels. Corporate balance sheets are robust, thanks in part to favorable financing and refinancing rates set in recent years. Companies have ample cash availability, and earnings dynamics are better than expected. The maturity profile is favorable as refinancing needs are deferred to 2025/2026.
Why choose a Eurizon bond strategy
Our solutions in the spotlight
Epsilon Fund - Euro Bond
Finding value by controlling volatility and drawdown
(Risk Class: 2, the risk indicator assumes you keep the product for 4 years)
Eurizon Fund - Limited Tracking Error - LTE Fixed Income Funds
* Morningstar assigns ratings based on comparisons of all funds within a specific Morningstar Category, rather than all funds in a broad asset class. Morningstar is not responsible for any damages or losses arising from any use of this information. For more information about the Morningstar ratings: www.morningstar.com
** Source: Morningstar - data as at 30 April 2024
This is a marketing communication. Before taking any investment decision, you must read the Prospectus, the Key Information Document (the “KID”), as well as the Management Regulations and the last available annual or semi-annual financial report. These documents are available in English (and the KIDs in an official language of your country of residence) and may be obtained at any time, free of charge on the Management Company’s website www.eurizoncapital.com.
The content of this document, including any opinions, does not constitute any legal, tax or investment advice. Past performance does not predict future returns. There is no guarantee that the positive forecasts mentioned in this document will be reached in the future. Please liaise with your tax and financial advisor to find out whether a product is suitable to your personal situation and understand the related risks and tax impacts. The tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Should the Sub-Fund be registered/authorised in your country, the entity in charge of processing subscription, repurchase and redemption orders and other payments to unit-holders relating to the units of the UCITS (“Order & Paying facilities”), as well the entity in charge of handling information and Fund documents (“Information facilities”).
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