Look east: Bond bets outside of the UK

BONDS

As a UK interest rate rise looms, and UK bonds look set to decline in popularity further, David Zahn, head of European fixed income at Franklin Templeton Investments, explains why he is favouring eastern Europe fixed income

Once interest rates rise, UK bond markets could underperform, and so investors are already looking elsewhere. But where are the bestprospects? Mainland Europe is currently experiencing slow growth, which is expected to continue. In addition, inflation is at very low levels on the continent and is close to zero in some countries; again that is expected to continue. However, the prevalence of a standardised view on Europe as a whole obscures the clear differences in both growth and investment opportunities between European regions, and indeed specific countries. Surprisingly, central...