ABN Amro MeesPierson cuts government bond holding

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ABN Amro Mees Pierson, the wealth management division of the Dutch bank has announced that it cut its exposure to sovereign bonds by a quarter in favour of more liquid investment products.

Partly as a result of this change in asset allocation, the relative importance of corporate bonds has increased from 33% to 44% as part of the overall portfolio, Ben Steinbach, head of investment strategy at ABN Amro Mees Pierson explains.

“Rates of government bonds have increased barely since mid-March and in countries like Italy, Spain and Portugal they even declined. Nevertheless, government bonds are currently extremely expensive, and we don’t see a lot of growth potential while the ECB is willing to buy government bonds with an effective return of less that -0.2%, which is the current level of deposit rates. This is why we cut our exposure in favour of more liquid strategies” he adds.

ABN Amro Mees Pierson remains overweight on corporate bonds, where it sees low default risks and income opportunities and European equities, where according to Steinbach, ECB policy had a positive impact.

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