The return of inflows could signal a turning point for a sector that as recently as February logged its worst underperformance against the market in more than three decades.
Telecoms’ high debt levels are one factor that deter many fund managers. But growing cash flows and a potential softening in the European Union’s historically tough stance on mergers in the sector means prospects for these shares look brighter.
“Some of the historical headwinds are fading away,” said Luca Finà, head of equity at Generali Insurance Asset Management, which is now selectively overweight in telecoms, having been underweight in 2021 and neutral last year.
“The capex cycle is mostly behind us, leading to an improved free cash flow generation, inflation is leading to price increases and (there’s) an apparent more favourable stance from regulators on…
