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Franklin Templeton is betting on Europe’s high-yield bank bonds

Franklin Templeton is betting on a rally in financial and industrial bonds in Europe, as it seeks out returns amid ever-tightening credit spreads.
"The asset manager is also overweight in periphery euro-area nations, mainly Italy, due to expectations for further spread compression over the next six to 12 months, he said. | Photo: Thomas Borberg
"The asset manager is also overweight in periphery euro-area nations, mainly Italy, due to expectations for further spread compression over the next six to 12 months, he said. | Photo: Thomas Borberg
By Priscila Azevedo Rocha / BLOOMBERG

The USD 1.5 trillion asset manager is overweight in both sectors amid confidence that the European Central Bank will keep supporting lenders and that the economy will bounce back from a coronavirus slump, said David Zahn, its head of European fixed income. Double-B and other high-yield bonds are a particular focus.

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