(Bloomberg) -- If Portugal was the star of European government debt markets in 2017, Greece could be this year’s, according to Algebris Investments.
As yields rise globally, investors are changing tactics for the right mix of safety and returns -- by moving money into previously spurned bonds that now look increasingly good against improving economic backdrops. Greek debt is a good example, offering value even after 10-year yields fell to 3.83 percent from over 7 percent a year ago, said Alberto Gallo, a money manager at Algebris. Ten-year German bunds currently pay 0.58 percent.
“We are positioned for a market where yields will rise,” Gallo told Bloomberg Television Thursday. But you can hedge that risk by trying to “hide in the countries, areas and sectors that are unloved. So for example, last year we saw Portugal do very well. This year, and at the end of last year, Greece is starting to recover,” he said.
Gallo’s macro fund is maintaining long positions in the securities across the Greek yield curve, he said.
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