Investors are feeling more confident in Spanish assets and related exchange traded fund as Spain sold off a record amount of debt, pushing borrowing costs to a seven-year low.
In comparison the broader Vanguard FTSE Europe ETF (NYSEArca: VGK) is up 0.5% year-to-date and increased 22.0% over the past year.
Spain issued 10 billion euros, or $13.6 billion, in new 10-year enchmark bonds maturing in April 2024, reports Angeline Benoit for Bloomberg.
“Spain looks to be on a recovery process and the consolidation of its fiscal conditions seem to have worked its way on the real economy,” Annalisa Piazza, a senior fixed-income strategist at Newedge Group, said in the article. “Demand was very solid” at the sale.
The surge in demand for the once troubled Eurozone peripheral state as they rebound from the financial debt crisis reveals the growing confidence in a recovery. [Strengthening PIIGS Puts Spotlight on Spain ETF]
“Spain is an example of the markets liking countries that implement reforms,” Alberto Gallo, head of European macro-credit research at Royal Bank of Scotland Group Plc, said in the article.