U.S. Yields at 3%? Franklin’s Making Too Much Sense
The money manager remains bearish on Treasuries even though the game has changed.
Franklin Templeton’s contrarian streak risks veering into stubbornness.
Photographer: Stephen Hilger/Bloomberg
No one can accuse Franklin Templeton’s top bond managers of lacking conviction when it comes to their bearish call on U.S. Treasuries.
Earlier this year, Michael Hasenstab shortened the average duration in his Templeton Global Bond Fund to -2.21 years, from -1.6 years at the end of 2018, even though the benchmark 10-year Treasury yield fell about 30 basis points over the first three months of 2019. The fund will probably release its second-quarter documents soon. Don’t expect them to show the firm has thrown in the towel on bets for higher yields, judging by recent comments from Sonal Desai, chief investment officer of Franklin Templeton’s $152 billion fixed-income group.