The new FTIF Templeton Emerging Markets Balanced Fund seeks to maximize a combination of capital appreciation and income in the long term, consistent with prudent investment management. The Fund will typically hold both emerging markets equity and debt securities, with the proportion of its assets allocated to each depending on the Fund managers’ view of the valuation, risk and opportunity set within each asset class.
The Fund’s management team, led by Dr. Mark Mobius, executive chairman, Templeton Emerging Markets Group, and Dr. Michael Hasenstab, co-director of the International Bond Department and portfolio manager, Franklin Templeton Fixed Income Group, seeks to add value through bottom-up fundamental sector, security and issuer analysis and top-down economic analysis. To help facilitate this process, the Fund leverages the expertise of research teams on the ground in local markets around the globe. Ultimately, the Fund utilizes the flexibility of its mandate to pursue relative opportunities based on the managers’ assessment of changing economic, market, sector, and issuer conditions.
Dr. Mobius and Dr. Hasenstab will be supported by a team of the most senior members from the Templeton Emerging Markets Group and the Franklin Templeton Fixed Income team to make active asset allocation decisions between fixed income and equity depending upon the relative attractiveness and valuations in those two sectors.
“Interest in emerging markets investing has never been greater, driven by the growth potential of these markets,” notes Dr. Mobius. “Templeton’s time-tested investment philosophy is built on in-depth research and a bottom-up, disciplined yet flexible approach to value which looks beyond short-term news and emotion. We bring that same philosophy to the Templeton Emerging Markets Balanced Fund, leveraging our established investment expertise and infrastructure in both emerging markets equity and fixed income to meet the growing investor interest for a balanced approach to the category.”
“This new strategy brings together the long-standing expertise of the Templeton Emerging Market Equity team and the Templeton Emerging Market Debt teams in one strategy, so we look for opportunities across the entire spectrum of emerging markets,” said Dr. Hasenstab. “We can take advantage of equity opportunities, currency, local interest rates, sovereign credit, and corporate credit, encompassing the broadest exposure to emerging markets.”
Given the low correlation between emerging markets equity and emerging markets fixed income, the Fund’s balanced approach between the two asset classes offers superior diversification, as well as potentially lower volatility and higher risk-adjusted returns than a pure emerging markets equity fund. These characteristics make the Fund suitable for retail investors seeking long-term capital appreciation and income from emerging markets, with less risk. Investors who want the convenience of outsourcing the asset allocation decision between emerging markets equities and bonds to the portfolio management team may also find the Fund an attractive solution.
Dhiraj Rai, Director – Gulf & Eastern Mediterranean, Franklin Templeton Investments, commented on the launch of the fund, “The Templeton Emerging Markets Balanced Fund is a one-stop emerging markets solution, offering access to two of the best known emerging markets experts in the fund management industry, in two growing asset classes, all in one product. By bringing our established expertise in emerging markets equities and fixed income to the still nascent emerging markets balanced fund category, we’re confident that we can offer an appealing solution to investors looking for a balanced exposure to emerging markets.”
Lead manager Dr. Mobius will be supported on the equity side by Dennis Lim, co-CEO and portfolio manager; Tom W.K Wu, senior executive vice president and portfolio manager; and Allan Lam, senior executive vice president and portfolio manager. The fund management team will be further supported by an experienced team of 49 emerging markets analysts and portfolio manager sitting in 17 different offices around the globe.
Lead manager Dr. Hasenstab will be supported on the fixed income side by Laura Burakreis, portfolio manager and research analyst. The fund management team will be further supported by an experienced team of 37 investment professionals sitting in nine different offices around the globe.
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