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Franklin Templeton launches gov bond fund
12 September 2013
Seeks to harness global recovery with low volatility income
Franklin Templeton Investments has launched a global government bond fund.
The fund, managed by John Beck and David Zahn, will take advantage of near-zero default rates in investment-grade sovereign debt and the global recovery.
John Beck, the co-lead portfolio manager and co-director of the firm's global fixed income department, said: “At the moment, some bond markets across the globe are offering investors appealing risk-adjusted returns.
“We believe this may be an encouraging time for prudent investment in the asset class.”
Franklin Templeton said the low correlation between investment-grade sovereign bonds and other major asset classes, combined with its lower volatility, would offer investors portfolio stabilisation and diversification.
The fund is constructed via a bottom-up research process, screened for income, capital appreciation and price stability. It looks to generate return via interest income and capital appreciation and will invest in fixed or floating-rate debt securities, plus “opportunistic exposure” to corporate and mortgage-backed securities and limited positions in below investment-grade debt from emerging market governments.
David Zahn, the fund’s co-lead portfolio manager, and senior vice president and head of European Fixed Income, added: “We allocate investments across the fixed income universe to help reduce risk and maintain flexibility.
“This approach enhances our ability to capitalise on market shifts and allows us to identify securities with credible prospects for income, capital appreciation and price stability.”