- Europe’s path towards strategic autonomy is opening new opportunities for bond investors across several sectors including defence, energy and technology
- Increased government spending and policy support are strengthening the outlook for many issuers in these key areas
- There is scope for diversification across sectors, regions and issuers, but investors should take a selective, bottom-up approach
The geopolitical landscape has undergone a significant shift in recent years, with global cooperation and multilateralism giving way to a more fragmented world.
Sovereignty and domestic resilience have become central to national policy agendas – not least for Europe, which needs to remain competitive and support its ‘social model’ – based on creating prosperity combined with protection and opportunities for its citizens.1
Europe is aiming to grow its economy while reducing its dependency on other nations and protecting itself against global threats and external shocks.
To achieve this, it is investing significantly across defence, infrastructure, technology, and improving its resilience across energy, industry, food and healthcare sectors. Policymakers are allocating unprecedented sums, both at a European Union and country level – all of which presents potentially attractive opportunities for fixed income investors.
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