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By Carl Vermassen, Senior Portfolio Manager, Petercam
Despite a lot of scepticism last year, Euro government bonds have done quite well year to date 2014. We discuss the reasons for their solid performance, and what we expect going forward. We argue that this asset class increases the efficiency of a portfolio thanks to its decorrelated behaviour versus risky assets.
What are the drivers behind the perhaps surprisingly good performance of Euro government bonds?
The graph below shows the performances (YTD as at 21 May 2014) of the countries that are part of the JP-Morgan EMU Government Bond Index.
GRAPHIQUE VOIR JOURNAL
Drivers are multiple and diverse:
1. Very low inflation prints...
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