Traditional index bond management gives higher index weightings to the most indebted countries, regardless of their capacity to service their debt. A country facing financial hardship and trapped in a debt spiral to remain solvent would see its index weight increase until the whole mechanism collapses.
Bruder, Hereil & Roncalli — Traditional index bond management gives higher index weighti
Traditional index bond management gives higher index weightings to the most indebted countries, regardless of their capacity to service their debt. A country facing financial hardship and trapped in a debt spiral to remain solvent would see its index weight…