Spain's Inflated Home Values Infect Mortgage Bonds

``The Spanish market is not the U.S. property market,'' Bertoni says. ``We don't have the famous subprime. Generally speaking, the collateral for each loan is always quite high.''

That hasn't prevented Kutxa's bond from losing 8 percent since it was issued in February last year. That contributed to the Pioneer fund underperforming the JPMorgan EMU Bond Index by 2.7 percentage points over the past 12 months.