MILAN, Oct 24 (Reuters) - U.S. investment firm PIMCO has moved to a slightly overweight position on Italian government bonds because it believes they have room to outperform German Bunds, a sovereign debt analyst at the asset manager was quoted as saying.
Italian bond yield spreads against Germany have fallen sharply following the appointment of a pro-European government in Rome and fresh monetary stimulus measures by the European Central Bank.
“We’re slightly overweight on (Italian) BTP bonds. It’s a tactical position because we believe the BTP/Bund spread could narrow,” Nicola Mai told MF daily in an interview.
California-based PIMCO, with $1.9 trillion of assets under management as of Sept. 30, is the world’s largest fixed-income investor.
Mai said however Italy remained vulnerable due to its excessively high debt, the near zero economic growth recorded over the past two decades and a lack of structural reforms.
Reporting by Valentina Za