A big reason is the potential return on Portugal’s debt. At 3.7 percent, the country’s 30-year bonds yield almost 2.4 percentage points more than comparable German bunds, the region’s benchmark.

Gains are likely to increase as the nation’s economy improves and the ECB’s debt purchases -- which currently stand at 60 billion euros ($65 billion) a month -- drive prices up and reduce the yield gap between the two markets.

Even after Portugal’s ruling coalition lost power to the minority Socialist government last month, the nation’s borrowing costs have fallen faster than those of Germany.

‘Obvious Investment’

It’s an “obvious investment,” said Thiel, whose New York- based firm oversees $4.5 trillion as the world’s largest money manager.

BlackRock is the biggest owner of Portugal’s bonds due in February 2045, holding more than 10 percent of the securities, data compiled by Bloomberg show. They have returned in excess of 10 percent since they were issued at the start of the year.

Investors were reminded of some of the risks of holding lower-rated debt. Spanish bonds fell after an inconclusive election on Sunday put the nation in uncharted political territory that could require long negotiations before a government is formed. While Spain’s 10-year yields climbed the most in a week, the reaction was muted across the rest of the euro area.

Pimco, which oversees $1.47 trillion globally, is also bullish on peripheral bonds such as those issued by Greece. Despite the relative lack of liquidity for the securities, the firm is the largest holder when it comes to investment advisers, regulatory filings compiled by Bloomberg show.

Greek Drama

Among the firm’s biggest investments in Greek debt are notes due in April 2019, held by the $52 billion Pimco Income Fund, the data show.