Franklin Templeton Investments Corp. today announced the launch of Templeton Global Bond Fund (Hedged) for investors looking to minimize the effects of currency fluctuations on their global fixed income investments.
“Canadians are looking for yield and diversification in their fixed income portfolios, but want to avoid currency fluctuations that can impact returns,” said Ronice Barlow, head of Strategic Planning & Business Development - Canada, Franklin Templeton Investments Corp. “This new hedged version of our award-winning Templeton Global Bond Fund will provide investors with fixed income exposure across global and emerging markets, while reducing the currency impact.”
Templeton Global Bond Fund (Hedged) is now available as an alternative to Templeton Global Bond Hedged Yield Class. Recently, Templeton Global Bond Hedged Yield Class was closed to new investments due to the March 2013 Canadian Federal Budget measures affecting the tax treatment of funds that employ “character conversion transactions” using forward contracts to convert income to capital gains.
Investors interested in moving their assets from Templeton Global Bond Hedged Yield Class into Templeton Global Bond Fund (Hedged) should discuss this with their investment advisor to determine if such a transfer is in-line with their goals and longer-term investment plans.
With the new currency-hedged fund and Templeton Global Bond Fund, which Canadians have been investing in since 1988, Franklin Templeton continues to offer two global bond fund options for investors. The portfolio management team endeavours to maximize returns in U.S. dollars for Templeton Global Bond Fund. With the new Templeton Global Bond Fund (Hedged), a currency hedge will be added via forward contracts to reduce the potential impact of exchange rate fluctuations between Canadian and U.S. dollars.
Templeton Global Bond Fund, which Templeton Global Bond Fund (Hedged) invests in, is managed by lead portfolio manager Dr. Michael Hasenstab and portfolio manager Dr. Sonal Desai. The fund managers are supported by the analysis and insight of Franklin Templeton Fixed Income Group’s global team of over 140 investment professionals with an average industry experience of more than 14 years.
“Our investment process seeks to take advantage of periods of elevated short-term volatility by identifying where markets have become disconnected from longer-term fundamentals and where we might benefit from positioning our investments when these fundamentals reassert themselves,” said Hasenstab. “This often leads to a contrarian view where we add to favoured positions while others are selling. Once volatility subsides and valuations begin to better reflect fundamentals, this can lead to potential subsequent gains.”
Templeton Global Bond Fund (Hedged) is available in Series A, F, I and O, based in Canadian dollars.
About Franklin Templeton Investments
Franklin Templeton Investments Corp. is a wholly owned subsidiary of Franklin Resources, Inc. (NYSE: BEN), a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 investment teams. The San Mateo, CA-based company has more than 65 years of investment experience and over US$834 billion (C$857 billion) in assets under management as of July 31, 2013.