Key Takeaways
- In the first half of the year, foreign investors bought €7.5 billion of Greek government bonds.
- Greece has put the crisis behind it and has some of the best economic growth in the eurozone.
- Greek government bonds are now investment grade.
While fears about sovereign debt are resurfacing again in Europe, Greece seems to have definitively left the eurozone crisis behind. Foreign investors have returned to its government bonds. According to the Bank of Greece, overseas investors have plowed €7.5 billion into Greek sovereign bonds already in the first half of 2025, compared with €10 billion for the whole of 2024.
Among the buyers of Greek government bonds are funds specializing in euro-denominated government bonds. Greek debt returned to investment grade status in 2023, with upgrades from rating agencies, including Morningstar DBRS. Investment grade means the country is less likely to default than those countries assigned sub-investment grade status by ratings agencies.
Greece’s Turnaround After the Sovereign Debt Crisis
Greece was on the brink of bankruptcy in the autumn of 2009, triggering the sovereign debt crisis in the peripheral countries of the eurozone, including Italy and Spain. Difficult years followed, which saw economic collapse. The government implemented severe fiscal austerity plans and structural reforms to bring public debt back under control. The restructuring enabled Greece to return to a primary budget surplus in 2022, and reduce its debt-to-GDP ratio.
In 2024, economic growth was 2.3%, beating the eurozone average of 0.9%. This, together with primary budget surpluses, brought the debt-to-GDP ratio down to 152.5%, from 164% in 2023, according to Eurostat data. Greece remains, however, the country with the highest debt-to-GDP ratio in the eurozone. On Sept. 5, Morningstar DBRS confirmed its BBB rating, with a “stable” outlook, highlighting economic progress and efforts toward a “prudent” fiscal policy. According to the International Monetary Fund, the primary budget surplus will average 2.4% of GDP until the end of the decade, and the debt-to-GDP ratio will fall to 125% by 2030.
Euro Government Bond Funds Offering Exposure to Greek Government Bonds
Greek government bonds account for 1.12% of the Morningstar Eurozone Treasury Bond Index. That compares with 21.86% in Italian government bonds and 14.56% in Spanish bonds. However, some active funds in the euro government bond category have a higher exposure to Greek debt.
Below is a detailed look at the characteristics of the five euro government bond funds most exposed to Greece and domiciled in Europe.
Nordea 1 - European Bond
The fund has an exposure to Greek government bonds of 12.50%, compared to 1.12% for the Morningstar Eurozone Treasury Bond Index. In the euro share class, the fund returned 0.19% over the last year, compared with a category average of 0.59%, but has lost 0.80% a year over the three-year period.
The Norwegian krone share class, which has the largest assets under management and is therefore shown in the table below, also underperformed the category over the last year and over the three-year period. According to Morningstar’s analysis, in recent years the fund has shown constant sensitivity to interest rate changes, much more so than the category average, and to BB-rated securities, which is just below investment grade.
LUX IM Generali Investments Euro Govies
The fund has an exposure to Greek debt of 8.38%, compared to 1.12% for the Morningstar Eurozone Treasury Bond Index. Over the last year, it has gained 0.02%, underperforming the average for euro-denominated government bonds. The fund, which has assets under management of €306.41 million, has no performance history yet, as it only launched in June 2024.
Generali Investments SICAV - Euro Bond
The fund, which has assets of €2.73 billion, has an exposure to Greek government bonds of 7.93%. Over the last year, it has gained 0.84%, outperforming the category, and ranking in the 34th percentile. Over the three-year period, it rose by an average of 2.23% compared to 1.38% for euro government bonds. The fund has in recent years underweighted AA-rated issues and maturities between three and five years, compared with the other funds in the category.
Robeco Euro Government Bonds
The Robeco fund has a 3% exposure to Greek government bonds, compared with 1.12% for the Morningstar benchmark index. The fund, which has €957.51 billion in assets under management, rose 0.76% over the last year, while over the three-year period it gained 1.68% a year, beating the category average. According to Morningstar’s analysis, in recent years, the strategy has overweighted euro-denominated government bonds with maturities between 15 and 20 years and those with a AAA rating.
Nordea Euro Obligaatio
The Nordea fund, which has assets of €1.16 billion, has an exposure to Greece of 2.92%. The sub-fund gained 0.37% in euros over the last year, compared to a category average of 0.59%. It also outperformed the category over the three-year period, with an annual increase of 1.53%. Management of the strategy passed to a new team in September 2023 and, since then, according to Morningstar’s analysis, the results have been strong.
Methodology for Greek Government Bond Funds
This article analyzes the largest funds in terms of size, excluding those with assets of less than €100 million, and those with portfolio data not updated as of June 30, 2025. Some sub-funds may not be available or may be available with classes different from those indicated in the article. Returns data is at Sept. 16, 2025.
