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The euro, he expects, will remain intact, given the "huge war chest" of the European Central Bank. "It prints its own money. They can provide an almost unlimited amount of liquidity to ringfence a Greek financial meltdown," he adds.
"It's going to be messy, but it's not Armageddon.There is reason to be a little optimistic. The [European debt] crisis has triggered some good changes. We can exploit these changes, with a longer term vision," says Hasenstab. Hasenstab has plenty of incentive and pressure to implement his vision. He co-manages over $24 billion in the Templeton Global Bond Fund , which invests in government bonds based in local currencies. The fund has outperformed its peers consistently for more than 10 years, but in 2011 it hit a rough patch, underperforming its category index by 7.55 percent.
Year to date, the fund is bouncing back a bit, beating its index by 1.37 percent, according to Morningstar data.
Investor capital flows, also tracked by Morningstar, are favoring bonds over equities right now in a big way — putting Hasenstab's bond fund on the right side of the market.
Of the $147.9 billion dollars that flowed into US mutual funds this year over $106.5 billion went into taxable-bond funds, while equity funds saw outflows of close to $34 billion.
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