Making money: what the experts think
Greek milestone
Greece’s return to the sovereign bond market this week, after a threeyear absence, has been billed as a major “milestone” in the country’s return to economic health, said Liz Alderman in The New York Times. The “jubilant” Greek PM, Alexis Tsipras, called the sale of five-year bonds – which raised s3bn for Athens’ coffers – a “significant step” towards ending the country’s “unpleasant adventure” with bailouts. The sentiment is bound to be echoed elsewhere: since 2010, when Athens was “shut off from borrowing in global markets”, the EU and the IMF have provided a “staggering” s326bn in financial lifelines.
Super Mario anniversary
Let’s not get too carried away about investor enthusiasm for Greek risk, said Kate Allen and Eleftheria Kourtali in the FT. About half of the bond’s buyers were owners of existing Greek debt, who were “enticed to swap their holdings” with a s40m sweetener from the government. Even so, “there could be few better ways” to mark the fifth anniversary of Mario Draghi’s pronouncement that he would do “whatever it takes” to preserve the euro than a successful bond issue from the “biggest casualty” of the debt crisis – particularly as “the eurozone’s recovery is in full swing”, and the ECB is “starting to edge towards an exit from stimulus”.
Beyond Dover…
Super Mario’s 2012 “bazooka” marked a turning point in the euro crisis – and “investors have good reason to celebrate”, said Ian Cowie in The Sunday Times. European Assets Trust, for instance, has delivered a “remarkable” 37% total return over the past year. Better yet, it’s still yielding 5.7%. “Who says you can’t have income and growth?” European funds still “look inviting”: as Darius Mcdermott of Chelsea Financial Services notes, they’re “an opportunity to buy into a region where company profits are being revised upwards”. Mcdermott tips Blackrock Continental European Income, and Fidelity European Values, which has “consistently beaten performance benchmarks”. Alternatively, you might consider Schroder European Alpha Income, or JPM Europe Dynamic, which has a bias towards mid-sized and smaller companies. Whatever happens with Brexit talks, investors would do well to remember that “opportunities do not end at Dover”.