Key Takeaways
- • Australian Retirement Trust, Australia's second-biggest pension fund, has been buying 10-year French government bonds, betting markets have overpriced France's fiscal troubles.
- • The fund began adding 10-year French debt in September 2026 when yields climbed past 4.5%, according to senior portfolio manager Jimmy Louca.
- • The fund stepped up purchases during an October 2026 selloff that pushed 10-year French yields to 5%, the highest level since 2002.
- • The fund's thesis also rests on the prospect of European Central Bank interest-rate hikes, a view that sets it apart from other investors avoiding French debt.
Summary
Australian Retirement Trust, Australia's second-biggest pension fund, is buying French government bonds while many other investors are stepping back, according to Bloomberg. The fund's position is based on the view that markets have overpriced France's fiscal troubles and the likelihood that the European Central Bank will raise interest rates.
According to Jimmy Louca, a senior portfolio manager at the fund, Australian Retirement Trust began adding 10-year French debt in September, when yields rose above 4.5%. The fund stepped up its purchases during an October rout in French bonds, driven by concerns over France's fiscal credibility and political instability. During that selloff, 10-year yields climbed to 5%, their highest level since 2002.
The episode highlights a divergence in positioning as other investors avoid French sovereign debt amid fiscal and political uncertainty. The full Bloomberg article could not be retrieved, so further detail on the fund's allocation size and any broader market reaction is not available.
According to Jimmy Louca, a senior portfolio manager at the fund, Australian Retirement Trust began adding 10-year French debt in September, when yields rose above 4.5%. The fund stepped up its purchases during an October rout in French bonds, driven by concerns over France's fiscal credibility and political instability. During that selloff, 10-year yields climbed to 5%, their highest level since 2002.
The episode highlights a divergence in positioning as other investors avoid French sovereign debt amid fiscal and political uncertainty. The full Bloomberg article could not be retrieved, so further detail on the fund's allocation size and any broader market reaction is not available.
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