Franklin Templeton Investments Corp. Wednesday 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.
“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,” said Ronice Barlow, head of strategic planning & business development – Canada, Franklin Templeton Investments Corp.
Templeton Global Bond Fund (Hedged) and Templeton Global Bond Fund, in which the new fund invests, are managed by lead portfolio manager Michael Hasenstab and portfolio manager Sonal Desai.
“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,” says 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.”
With the new fund, 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 (Hedged) is available in Series A, F, I and O, based in Canadian dollars.
The new fund is 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 federal budget measures affecting the tax treatment of funds that employ “character conversion transactions” using forward contracts to convert income to capital gains.
Toronto-based Franklin Templeton Investments Corp. is a wholly owned subsidiary of San Mateo, Calif.-based Franklin Resources, Inc., a global investment management organization operating as Franklin Templeton Investments.