Greece, Spain lead government bond returns in the third quarter
EUROPE - Greece and Spain - which have hit the headlines this year due to their large debt burden - are leading total returns in the third quarter of this year, according to the S&P Eurozone Government Bond index.
Greece was the leader of the pack, returning 4.7%, followed by Spain with 4.1%.
However, Greece is still down 15% on the year, with Spain barely in positive territory at 1.6%.
The worst performers in the third quarter were Ireland, with a 4.3% loss, Slovenia (-2.3%) and Portugal (2.1%).
The best year-to-date return has been generated by Austria, with 9.4%, followed by Germany (9%), the Netherlands (8.9%), Slovakia (8.8%) and France (8.5%).
In the On the Record column in IPE’s October issue, pension funds said one of their main concerns were the widening spreads in Portugal, Ireland, Greece and Spain (PIGS), but added that the record low yields for German bonds posed just as big a problem.
Due to market performance and new supply trends, the composition of the index has continued to shift, resulting in France, Germany, Austria, the Benelux countries and Finland now representing more than 60% of the index, compared with 58.3% at the start of the year.
At the same time, the weight of PIGS debt combined dropped to 16.9% of the index compared with 18.9% at the start of the year.
Greek debt now accounts for 3.4% of the index, compared with 5.3% at the start of the year.
The S&P Eurozone Government Bond index seeks to measure the performance of the developed European government bond market.
All European government bonds with maturities over one year are included, with the exception of inflation indexed, floating rate and zero-coupon bonds.