Franklin Templeton Investments Launches Absolute Return Bond Fund for UK Investors

From Franklin Templeton Investments
Contact Mel Shelley
Telephone (0)20 70738541

London, 28 February 2018 – Franklin Templeton Investments1 today announced the launch of the Franklin Absolute Return Bond Fund2, a sub-fund of our UK-registered OEIC, for UK investors.

The Fund will be managed by San Mateo based David Yuen, Senior Vice President, Portfolio Manager, Franklin Templeton Fixed Income Group, and New-York based Michael J. Materasso, Senior Vice President, Franklin Templeton Fixed Income Group.

The aim of the fund is to provide an absolute return, through a combination of income and capital growth, each calendar year. In addition, the Fund aims to provide an overall return of 2-3% above the London Interbank Offered Rate (LIBOR) 90 Day (GBP) over a full market cycle (being 3-5 years) after management fees are deducted. Additionally, the strategy aims to maximise risk-adjusted returns while minimising drawdowns.

This fund launch provides UK investors access to the proven strategy offered globally through the US-registered3 and Luxembourg-registered4 Franklin Flexible Alpha Bond Funds, which collectively have assets under management of US$900m5.

The Franklin Absolute Return Bond Fund is benchmark-unconstrained and will invest primarily in a diversified portfolio of fixed and floating rate debt securities and related derivatives.

David Yuen, Senior Vice President, Portfolio Manager, Franklin Absolute Return Bond Fund, said:
“We are excited to bring this strategy to UK investors and offer an unconstrained, risk focused approach where volatility is managed. Our investment process leverages the in-depth knowledge of our experienced fixed income teams globally and our approach with dynamic sector rotation, active currency management, security selection and relative value positioning, while aiming to manage risks such as duration.”

Alex Brotherston, Head of UK Retail Sales, said:
“We’ve seen a growing demand for outcome investing as investors look for alternatives to traditional fixed income mandates that don’t rely solely on interest rate movements for performance. The Franklin Absolute Return Bond Fund offers a flexible mandate that brings diversification to both the returns and risk profile of an investor’s fixed income allocation. We believe this fund will appeal to investors who are looking to diversify and complement the core fixed income portion of their portfolios, whilst accessing pure alpha and hedging their portfolios to mitigate downside volatility which is inherent in long-only strategies.”

Notes to Editors:

  1. Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management to retail, institutional and sovereign wealth clients in over 170 countries. Through specialized teams, the company has expertise across all asset classes—including equity, fixed income, alternative and custom solutions. The company’s more than 650 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in over 30 countries, the California-based company has 70 years of investment experience and over $770 billion in assets under management as of 31 January 2018.

    In the UK, Franklin Templeton Investments offers a distinct and diversified investment line-up, comprising three major international equity houses (Franklin, Templeton and Mutual Series); a specialist UK equity house Franklin Templeton Fund Management Limited); several dedicated country-specific equity houses; complemented by a substantial global fixed income group. Franklin Templeton Investments promotes to UK intermediaries 100 funds, including:
    • 86 Luxembourg-registered SICAV funds including 70 GBP share classes
    • 14 UK-registered OEIC funds
    • 1 investment trust

  2. Franklin Absolute Return Bond Fund is a sub-fund of Franklin Templeton Funds (FTF), a UK-domiciled OEIC range. For further information, please refer to relevant Key Investor Information Document.

  3. Franklin Flexible Alpha Bond Fund is a US registered fund and is not available for distribution to European investors.

  4. Franklin Flexible Alpha Bond Fund is a sub-fund of Franklin Templeton Investment Funds (FTIF), a Luxembourg-domiciled SICAV range. For further information, please refer to relevant Key Investor Information Document.
    Past performance is no guarantee of future performance. This document does not constitute or form part of any offer for shares or an invitation to apply for shares. Subscriptions for shares can only be made on the basis of the Fund’s current prospectus and the relevant Key Investor Information Document, accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter. The price of the shares of the Funds and the income received from them can go down as well as up, and investors may not get back the full amount invested. Currency fluctuations may affect the value of overseas investment. An investment in the Franklin Templeton Funds (FTF) or the Franklin Templeton Investments Funds (FTIF) entails risks, which are described in the Fund’s prospectus and relevant Key Investor Information Document. All or most of the protections provided by the UK Regulatory System will not apply to Franklin Templeton Investment Funds (SICAV) Investors.
  5. Source: Franklin Templeton Investments as of 31 January 2018.

This press release is intended to be of general interest only, and does not constitute professional advice. Franklin Templeton Investments and its management groups have exercised professional care and diligence in the collection and processing of the information in this press release. Franklin Templeton Investments makes no representations or warranties with respect to the accuracy of this document. Franklin Templeton Investments shall not be liable to any user of this report or to any other person or entity for the inaccuracy of information contained in this press release or for any errors or omissions in its contents, regardless of the cause of such inaccuracy, error or omission. Opinions expressed are the author’s at publication date and they are subject to change without prior notice. Given the rapidly changing market environment, Franklin Templeton Investments disclaim responsibility for updating this material. Any research and analysis contained in this document has been procured by Franklin Templeton Investments for its own purposes and is provided to you only incidentally. Issued by Franklin Templeton Investment Management Limited (FTIML), Cannon Place, 78 Cannon Street, London EC4N 6HL. FTIML is authorised and regulated by the Financial Conduct Authority.