Beck, co-director of Franklin Templeton’s international bond group, believes this is because signs of recovery are beginning to show in three key areas: the banking system, sovereign debt and politics. "We are beginning to see things put in place that we feel will at least begin to stabilise the situation, to get it resolved over a period of time that is achievable," he commented.
Monetary policy steps taken by the European Central Bank (ECB) over the past year have added to Beck’s optimism.
He says the ECB’s Long Term Refinancing Operation last December provided some relief for the region’s ailing banking sector, while its outright monetary transactions will shore up the cracks in sovereign debt.
Political upheaval added to investor fears, but Beck says the results of the recent Dutch election leaned towards a pro-European outcome which, coupled with the German parliament’s approval of the legality of the eurozone’s bailout mechanism, has calmed investors' concerns.
While Beck believes the investment horizon is brightening for peripheral economies, he is not without reservations about some of the more troubled countries in the single-currency area.
"For some countries, we would still be very cautious," he said.
"We think there are significant reservations over Greece, and probably over Portugal, and a question mark over whether the OMT is perhaps beginning to resolve some of the problems in Spain."
"But for other countries where the debt-to-GDP ratio has been more stable, where the fiscal position has been less in deficit, for example in Ireland or in Italy, there are grounds for optimism."
Beck says a period of limited lending by European banks, coupled with reserved government and private sector spending, will subdue growth for some time to come. However, he believes a period of calm will be a good starting point for investors to regain confidence in the region.
"In the last two to three years we have stumbled from one crisis to the next and hoped for a resolution that was never really ultimate and forthcoming," he said.
"So we hope for a quiet period where we don’t have to look forward to an election, or vote, or disaster, or the necessity of a midnight finance ministers’ meeting."
Beck co-manages a range of Franklin Templeton’s fixed income funds, including the four crown-rated £87m Templeton Global Total Return Bond fund, alongside Michael Hasenstab and Sonal Desai.
Performance of fund vs sector since launch
Source: FE Analytics
Beck’s comments support a recent study from Schroders, which found that 41 per cent of advisers are looking to increase their exposure to Europe before the end of the year.
His Templeton Global Total Return Bond fund is a top-quartile performer over the three years since launch. It has a minimum investment of £1,000 and a TER of 1.35 per cent. It is currently yielding 4.59 per cent.