Investment Institute
Fixed Income

SSA bonds: A sustainable route to institutional portfolio diversification?

  • 09 November 2022 (7 min read)

Key points:

  • The euro-denominated SSA bond universe – which often benefits from government guarantees – in our view currently offers an attractive spread pick-up over euro government bonds
  • We believe SSAs present one of the best responsible investment profiles within the fixed income universe
  • Adding allocation to SSA bonds could improve diversification and liquidity, in our view, and their predictable cashflows can complement both traditional credit and liability-matching portfolios

Supranational, sub-sovereigns and agency (SSA) bonds are a distinct but often overlooked sub-asset class within fixed income. We believe they can offer an attractive investment opportunity to institutional investors due to a potential improved yield over government bonds, their typically higher credit ratings and a diverse risk profile.

Many European pension funds a