Handlebars + ERB

example_usage.js.erb

Backbone.View.extend({
  template: Handlebars.compile(
    <%= embed('template.hbs').inspect %>
    // some .hbs.erb files are also loaded
  ),
  // ...
})

sprockets_v3.rb

#
# Makes it possible to embed Handlebars templates & SVG images directly in our JS source.
# They're registered with Sprockets, so it can reload them when they're modified.
# `asset_data_uri` is similar but it base-64 encodes them, which breaks compression.
#

env.register_mime_type 'text/x-handlebars-template', extensions: ['.hbs']

env.context_class.instance_exec do
  def embed(file)
    path  = resolve file, pipeline: :self
    path  = "file://#{path}"

    # Without this we get errors like `could not convert "image/svg+xml" to nil`
    types = {'hbs' => 'text/x-handlebars-template', 'svg' => 'image/svg+xml'}
    if type = types[file.split('.').last]
      path += "?type=#{type}"
    end

    asset = load path
    asset.source
  end
end

sprockets_v4.rb

#
# Makes it possible to embed Handlebars templates & SVG images directly in our JS source.
# They're registered with Sprockets, so it can reload them when they're modified.
# `asset_data_uri` is similar but it base-64 encodes them, which breaks compression.
#

env.register_mime_type           'text/x-handlebars-template', extensions: ['.hbs.erb', '.hbs']

# trying to emulate https://github.com/rails/sprockets/blob/3224a80e833f43885b0870509ffdd3fd00109076/lib/sprockets.rb#L179
env.register_transformer_suffix ['text/x-handlebars-template'], 'application/\2+ruby', '.erb', Sprockets::ERBProcessor

env.context_class.instance_exec do
  def embed(path)
    asset = depend_on_asset(path)
    asset.source
  end
end

you saved my day!