From Morningstar: 2025-06-20 09:19:00

1. Italy, Greece, and Spain, previously hit hard by the sovereign debt crisis, now have a better economic profile, attracting government bond fund managers.
2. Fixed-income investors now favor government debt of Portugal, Italy, Greece, and Spain, which have made a comeback since the crisis of 2010-2012.
3. Defense spending and efforts to support eurozone growth are drawing capital flows to southern European countries like Italy, Spain, and Greece.
4. Morningstar data shows fund managers are overweight Italy, Spain, and Greece, with their debt now considered investment grade rather than junk.
5. Southern European countries have improved fiscal policies and economic growth, leading to a re-evaluation of their sovereign debt.
6. Bonds yields are narrowing compared to German bunds, the eurozone’s benchmark bond, indicating growing investor confidence in these countries.
7. Nordea 1—European Bonds fund has significant exposure to Italian and Greek government bonds, reflecting their attractiveness compared to Nordic countries.
8. Southern European covered and government bonds offer a more attractive risk-adjusted return profile than Nordic countries and Germany, according to Nordea Asset Management.
9. RBC BlueBay remains optimistic about peripheral countries like Greece and Italy, with an overweight stance on Croatia for its positive fundamental story.
10. Country selection is crucial for generating alpha in fixed income portfolios, with historical data showing Italy and Greece as major contributors to returns.
11. Heightened defense spending and eurozone growth potential are boosting prospects for the region, attracting capital back to Europe.
12. RBC BlueBay’s Investment Grade Euro Government Bond fund has exposure to Italy, Greece, and Spain, aligning with the Morningstar index data.

Read more at Morningstar: Why Bond Fund Managers Now Back Italy, Greece and Spain