Schroders Bets Big on Hungarian Euro Adoption Convergence

Schroders Plc has invested in Hungarian bonds, betting that the country's push towards euro adoption will deliver fast convergence-trade gains. James Ringer, who runs a bond portfolio with an unconstrained mandate, sees Hungarian bonds as the top sovereign trade globally and has exposure to both hard-currency and local debt.

The investment strategy is reminiscent of the 1990s, when investors flocked to European countries preparing for the launch of the euro. Hungary's government yields are moving towards those of peers already in the currency union, which Schroders believes will deliver fast convergence-trade gains.