Franklin Templeton gives investors access to Saudi Arabia, one of the world’s fastest growing markets, with two new products

London, 29 October 2024 – Franklin Templeton¹ is pleased to announce the launch of the Franklin Saudi Arabia Bond Fund², a Luxembourg-registered SICAV, and Franklin FTSE Saudi Arabia UCITS ETF³ , two new products which offer investors access into the rapidly growing Saudi Arabia market.

Adam Spector, EVP, Global Advisory Services at Franklin Templeton, commented: “Franklin Templeton has been a long-term investor both in the region and in Saudi Arabia’s public markets across equities and fixed income for many years. Through its Vision 2030 plan, the country continues to take steps to improve the business environment and diversify its economy away from oil and attract foreign investments. As one of the fastest growing economies globally, this is a strategic market for us, and we are excited to offer international investors the opportunity to participate in Saudi Arabia’s growth story.” 

Jaspal Sagger, Head of Global Product Strategy, Franklin Templeton said: “We are pleased to launch a new actively managed mutual fund focusing on opportunities in the Saudi fixed income market and a new equity ETF providing broad and diversified exposure to the Saudi equity market, the largest equity market in the Gulf region.  Investors may choose to utilise these new products to both diversify their portfolios and to access the growth opportunities from this fast-paced developing market.”

The investment objective of the Franklin Saudi Arabia Bond Fund is to maximise total investment return consisting of a combination of income, capital appreciation and currency gains in the long term. The fund seeks to achieve its objective by investing primarily in debt securities and obligations issued by government, government-related or corporate entities located in Saudi Arabia. The Franklin Saudi Arabia Bond Fund will be managed by Dubai-based Mohieddine (Dino) Kronfol, Chief Investment Officer Franklin Templeton Fixed Income, supported by a team of portfolio managers in Riyadh and Dubai.

Kronfol added: “Saudi Arabia represents the Golf Cooperation Countries’ (GCC) largest and fastest growing bond market.  Despite this growth, and increasing share of emerging market issuance, debt metrics remain robust and sustainable, on a relative and absolute basis, so that investing in Saudi bonds can potentially deliver attractive returns with valuable diversification benefits.”

Saudi Arabia equity market:

Saudi Arabia is the largest oil exporter and holds 25%⁴ of all conventional reserves in the world.  The country will be a key player in the energy transition.  It is gradually diversifying away from oil dependency, making it more appealing to foreign investors.  Its equity market, which is the largest in the Gulf region, is becoming a larger allocation for emerging markets investors with US $ 2.7⁵ trillion in market capitalisation.  While Saudi stocks were restricted to local investors for many years, the equity market has been opening to foreign capital since 2015 and has now grown to a weight of just over 4%⁶ in the FTSE Emerging Market Index.

The Franklin FTSE Saudi Arabia UCITS ETF is an index tracking ETF, which provides exposure to large- and mid-sized companies in Saudi Arabia offering investors the opportunity to invest in the largest economy in the Gulf region in a cost-efficient and flexible way at a TER of 0.39%⁷. It is passively managed and tracks the performance of the FTSE Saudi Arabia 30/18 Capped Index NR (Net Return), which contains 64 large and mid-cap Saudi Arabian equities.  The ETF will be managed by Dina Ting, Head of Global Index Portfolio Management, and Lorenzo Crosato, ETF Portfolio Manager, Franklin Templeton.

The Franklin Saudi Arabia Bond Fund and Franklin FTSE Saudi Arabia UCITS ETF are registered in Austria, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Spain, Sweden and the United Kingdom.  Additionally, the ETF will list on the Deutsche Börse Xetra (XETRA) on 29 October 2024 under ticker FLXS, London Stock Exchange (LSE) on 30 October 2024 under ticker KSA, and Borsa Italiana on 6 November 2024 under ticker SAUDI.

For more information on the Franklin Templeton ETF range please visit: www.franklintempleton.co.uk.

- ENDS –

Contacts:

Elena Birjovanu Senior Corporate Communications Manager Franklin Templeton Tel: +40 725 301 189 Email: [email protected]

Dorine Johnson Head of Corporate Communications EMEA Franklin Templeton Tel: + 44 207 073 8538 Email: [email protected]

Notes to Editors:

This is a marketing communication. Please refer to the prospectus of the UCITS and to the KIID/KID before making any final investment decisions.

1. Franklin Resources, Inc. [NYSE:BEN] is a global investment management organisation with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialisation on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.6 trillion in assets under management as of 30 September 2024. For more information, please visit www.franklintempleton.co.uk and follow us on LinkedIn, X, and Facebook.
2. Franklin Saudi Arabia Bond Fund is a sub-fund of Franklin Templeton Investments Funds (FTIF), a Luxembourg-domiciled SICAV. Subscriptions to shares of FTIF can only be made on the basis of the current prospectus, and, where available, KID/KIID (or any other relevant offering document), accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter. The value of shares in FTIF and income received from it can go down as well as up, and investors may not get back the full amount invested.  The value of shares in the fund and income received from it can go down as well as up and investors may not get back the full amount invested.  Other material risks include: Concentration risk: the risk that arises when a fund invests in relatively few holdings, few sectors or a restricted geographic area. Performance may be more volatile than a fund with a greater number of securities. Credit risk: the risk of loss arising from default that may occur if an issuer fails to make principal or interest payments when due. This risk is higher if the Fund holds low-rated, sub-investment-grade securities.  Emerging markets risk: the risk related to investing in countries that have less developed political, economic, legal and regulatory systems, and that may be impacted by political/economic instability, lack of liquidity or transparency, or safekeeping issues.  Debt Securities Risk: as interest rates rise debt securities will fall in value. Issuers of debt securities may fail to meet their regular interest and/or capital repayment obligations. All credit instruments therefore have potential for default. Higher yielding securities are more likely to default.  Liquidity risk: the risk that arises when adverse market conditions affect the ability to sell assets when necessary. Such risk may be triggered by (but not limited to) unexpected events such as environmental disasters or pandemics. Reduced liquidity may have a negative impact on the price of the assets. For a full discussion of all the risks applicable to this Fund, please refer to the “Risk Considerations” section of the current prospectus of Franklin Templeton Investment Funds.  
3. Franklin FTSE Saudi Arabia UCITS ETF is a sub-fund of the Franklin Templeton ICAV, an Irish Collective Asset-managed Vehicle, incorporated under the laws of Ireland.An investment in Franklin Templeton ICAV range entails risks, which are described in the Prospectus, its supplements and in the relevant Key Investor Information Document. The value of shares in the funds and 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 investments. There is no guarantee that the fund will meet its objective. Significant fund risks include: Index License Risk: To utilise an Index, the Fund may need to have a licence agreement signed with the Index Provider. If, at any time in respect of an Index, the licence granted terminates or disputed, impaired or ceases to exist, the Directors may be forced to replace the Index with another Index. Such a substitution or any delay in such a substitution may have an adverse impact on the Sub-Fund. Single Country/Region Risk: This fund invests primarily in Saudi Arabia, which means that it is more sensitive to local economic, market, political or regulatory events in Saudi Arabia, and will be more affected by these events than other funds that invest in a broader range of regions. Index related risk: the risk that quantitative techniques used in creating the Index the Fund seeks to track do not generate the intended result, or that the portfolio of the Fund deviates from its Index composition or performance. Index Tracking Risk: No financial instrument or set of investment techniques enables the returns of any Index to be reproduced or tracked exactly. Changes in the investments of any Sub-Fund and re-weightings of the relevant Index may give rise to various transaction costs, operating expenses or inefficiencies which may adversely impact a Sub-Fund's tracking of an Index. Passive Investment Risk: An Index Tracking Sub-Fund will be negatively affected by general declines in the securities and asset classes represented in its Index. Because Index Tracking Sub-Funds are not “actively” managed, Market disruptions and regulatory restrictions could have an adverse effect on an Index Tracking Sub-Fund's ability to adjust its exposure to the required levels.  For a full discussion of all the risks applicable to this Fund, please refer to the “Risk Considerations” section of the current prospectus of Franklin Templeton ICAV.
4. Source: https://epicenter.wcfia.harvard.edu/blog/deal-keeps-oil-flowing, as of 1 June 2023
5. Source: Bloomberg LLP, as of 30 September 2024
6. Source: FTSE Russell Factsheet FTSE Emerging Index, as of 30 September 2024
7. The charges are the fees the fund charges to investors to cover the costs of running the Fund. Additional costs, including transaction fees, will also be incurred. These costs are paid out by the Fund, which will impact on the overall return of the Fund. Fund charges will be incurred in multiple currencies, meaning that payments may increase or decrease as a result of currency exchange fluctuations.

This press release is intended to be of general interest only and does not constitute professional advice. Franklin Templeton and its management groups have exercised professional care and diligence in the collection and processing of the information in this press release. Franklin Templeton makes no representations or warranties with respect to the accuracy of this document. Franklin Templeton 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.

The views expressed are of those providing them and the comments, opinions and analyses are rendered as of the publication date and may change without notice. The information provided in this material is not intended as complete analysis of every material fact regarding any country, region or market.

Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes.

Please consult your financial advisor before deciding to invest.

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