Templeton’s Hasenstab: Ignore Treasurys, Seek Emerging Markets

Friday, 22 Jun 2012 07:42 AM

By Dan Weil

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
US Treasurys have traditionally stood as the ultimate provider of risk-free return. But that’s no longer the case, says Michael Hasenstab, manager of Templeton Global Bond Fund.

So he suggests that investors look overseas for bond investment opportunities, particularly in emerging markets.

The problem with Treasurys comes on both the risk and return sides, Hasenstab tells Morningstar’s Investment Conference. With interest rates near record lows, investors aren’t adequately compensated for the risk created by the Federal Reserve’s excessive money printing.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.

The huge monetary accommodation should lead to a weaker dollar, which means U.S. investors should set their sights elsewhere, he says.

Hasenstab talks up emerging markets in Asia and Europe.

He thinks the threat of a financial meltdown in Europe is overblown. “We do not believe in the Armageddon scenario for Europe.”

One point of strength in the continent is Germany’s exports, which surged 5.8 percent in the first quarter from a year earlier, Hasenstab says. “So our exposure in Poland and Hungary is really linked in to the German export machine.”

He’s also bullish on Ireland – “a country which I think has done an exceptional job of tackling very tough problems and is on the road to a solution.”

Many experts share Hasenstab’s bearishness on Treasurys.

“Whatever the combination of reasons, government securities do not pay enough to compensate for duration risk,” according to a research report from money management firm Smith Breeden obtained by Barron’s.

Editor's Note: I Wish I Were Wrong — Economist Laments Being Right. See Interview.



© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved