Harshendu Bindal, Senior Director – Central and Eastern Europe, Middle East & Africa – commented:
“These four new funds are diversified strategies, which will give investors having a long-term view, a great opportunity in the current market environment to invest at very attractive valuations.”
The Funds are as follows:
Templeton Asian Smaller Companies Fund
This new Fund seeks to invest primarily in equity securities of companies with a market capitalisation of less than $2bn in Asia (excluding Japan) or in those companies that derive a significant portion of their revenues or profits from Asian economies.
Asia continues to display robust economic growth despite the global economic slowdown.
This growth has led to rising per capita income, a growing middle-class, increasing consumer demand and continued reforms that are improving the business and investment sectors.
In addition, Asia is well equipped to withstand volatility as the foreign exchange reserves of several Asian countries have increased dramatically over the past decade.
Within this environment, small-cap companies have the potential to deliver substantial capital appreciation as they develop into well-established, large-sized companies.
Templeton Frontier Markets Fund
The Templeton Frontier Markets Fund aims to invest primarily in equity securities of companies in or significantly exposed to frontier markets, thus allowing investors to access smaller countries that are considered to be in the nascent stages of development and exhibiting strong growth potential to become tomorrow’s emerging markets.
Considering markets such as China, India, Brazil and Russia, all of which have a market capitalisation of greater than $1 trillion, frontier markets whose market capitalisations range from less than $10bn to $100bn, offer tremendous potential for growth.
Frontier economies such as Qatar, UAE and Panama are expected to grow 11.8%, 8.4% and 7% respectively in 2008, whilst developed markets such as the U.S., U.K. and Japan are forecast to have much slower growth of 1.5%, 1.7% and 1.3% respectively.
In addition, frontier markets offer low correlation to global markets through exposure to diverse economic themes and attractive companies trading at low price-to-earnings ratios.
Both Funds will be managed by Dr. Mark Mobius, Executive Chairman, Templeton Asset Management, who commented: “Investment in Asian smaller companies is consistent with Templeton’s time-tested philosophy of investing in overlooked and under-researched stocks until their intrinsic values are reached. We believe this greatly unexplored asset class provides a substantial opportunity for us to apply our vast emerging markets research capabilities to the small-cap arena. The Templeton Frontier Markets Fund provides investors the opportunity to invest in a ‘younger’ generation of emerging markets”.
Templeton is a pioneer in emerging markets investing, having been the first to set up a dedicated emerging markets equity team in 1987 under the leadership of Dr. Mobius.
The team consists of over 50 investment professionals, including 38 portfolio managers and analysts across 14 emerging markets offices, providing access to local resources and facilitating relationships with local contacts.
This on-the-ground presence enables the investment team to carry out bottom-up fundamental research on lesser-known smaller companies and frontier markets, which may not be covered by the investment community.
Franklin World Perspectives Fund
This new Fund seeks to invest in growth stocks in developed, emerging and frontier markets across the entire market capitalisation spectrum and will aim to outperform the MSCI All Country World Plus Frontier Markets Index.
This is a unique product within the FTIF range which combines the insight and knowledge of Franklin Templeton’s local asset management teams.
Over the past 15 years, Franklin Templeton has amassed extensive experience with local asset management groups such as Canadian-based Bissett, Brazilian-based Bradesco and Dubai-based Algebra Capital, as a result of acquisition or joint ventures.
Thus, the Franklin World Perspectives Fund combines a bottom-up approach to individual security selection with a strategic country allocation process.
Lead Portfolio Manager and Franklin Local Asset Management International CIO, Stephen Dover, will use top-down analysis combined with input from local portfolio managers to determine regional allocations.
Local asset managers based in Calgary, Chennai, Dubai, Frankfurt, San Mateo, Sao Paulo, Seoul and Tokyo will be given complete freedom to manage their respective sub-portfolios.
“We believe the best opportunities for this new Fund lie within the expertise of our on-the-ground asset managers worldwide,” said Stephen Dover.
“Not only do local managers have the obvious advantage of knowing the language and culture, they are also more likely to know the companies well. In most of these markets, a few stocks dominate the benchmarks. Often, global investors invest in some of these top stocks to get ‘local’ access. But truly local managers can more easily access the stocks that do not dominate the market but may be great investment opportunities.”
Franklin Mutual Euroland Fund
Last but not least, the Franklin Mutual Euroland Fund aims to achieve long-term capital appreciation by investing in securities of companies incorporated or having their principal activities in Euroland countries.
Lead Portfolio Manager and Mutual Series Vice President, Philippe Brugère-Trélat, will strive to provide investors with excellent risk-adjusted returns over the longer term by focusing on undervalued equities, distressed securities and arbitrage opportunities – three key elements that are at the core of Mutual Series deep-value investment process.
“We believe that value investing can preserve investors’ capital in the long-term,” said Philippe Brugère-Trélat, “and as a consequence the Fund’s average holding period will be multiple years. We look for companies that are priced at a significant discount to their intrinsic value.”
He added: “We also invest where we see value from a merger. The other area we invest is in distressed securities. But we do not take risks in these situations and look to protect against downside losses.”
Sunday, October 26- 2008 @ 14:25 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.