“The big opportunity in Europe now is in credit, both in IG and high yield. We’ve seen a significant sell-off in these markets [last year], and now you’re getting paid an appropriate spread,” says Zahn, who is looking to sell his Italian government bond holdings and replace them with corporate bonds.
The ever-rising dollar?
Zahn is not so sure the dollar will continue its rise against almost all other currencies in 2016. “It depends on which currencies. There are some currencies that have sold off quite a bit recently, and those will probably appreciate versus the dollar,” says Zahan, who also challenges the notion that rising Fed rates mean the dollar will strengthen in the medium term.