Franklin Templeton Investments Corp. today announced that shareholders of Templeton China Tax Class fund have voted in favour of expanding the fund’s mandate to include the ability to invest in Brazil, Russia and India.

The new Templeton BRIC Tax Class fund is the only one of its kind in Canada that bundles together the investment opportunities offered by Brazil, Russia, India and China in one fund. The changes will take effect on August 15.

“Changing the mandate of the fund to invest in the BRIC nations provides shareholders access to the world’s largest and fastest growing emerging market economies,” said Mark Mobius, lead manager of Templeton BRIC Tax Class fund, in a news release.

“The BRIC nations are the new engines of economic growth with large populations, strong GDP growth, per capita income growth and strong market performance.”

The fund uses a value investment style to invest in companies listed in Brazil, Russia, India and China (including Hong Kong and Taiwan), as well as investing in companies outside the BRIC nations that may benefit from doing business with these growing economies.

“In the BRIC nations, GDP growth is very strong and they’ve outdistanced the United States in terms of economic growth,” said Mobius. “The BRIC nations offer investment value, with stock valuations roughly 50% cheaper than U.S. equity markets.”

Templeton BRIC Tax Class fund is part of Franklin Templeton’s Tax Class structure, which allows investors to switch between funds and portfolios while deferring taxable events until they redeem from the structure.

The company also announced several proposed changes to its fund lineup that will be voted on at a special meeting of security holders on October 11, in Calgary.

“This move is designed to streamline some of our more specialized funds and provide investors with a more compact and efficient lineup to choose from,” said Don Reed, President and CEO of Franklin Templeton Investments. “We are also proposing that the funds be under our tax class umbrella, making it easier for investors to switch funds without triggering a tax event.”

The proposed changes are:

  • Franklin U.S. Large Cap Growth Fund, Franklin U.S. Large Cap Growth Tax Class and Franklin Flex Cap Growth Fund will merge into Franklin Flex Cap Growth Tax Class;
  • Franklin World Telecom Fund, Franklin World Telecom Tax Class and Franklin Technology Fund will merge into Franklin Technology Tax Class; and
  • Franklin World Growth Fund will merge into Franklin World Growth Tax Class.

In addition, unitholder approval will be sought for the continuing funds to adopt the investment objectives and strategies of the terminating funds in which they currently invest.

The proposed investment objectives are as follows:

  • Franklin Flex Cap Growth Tax Class: Capital appreciation by investing primarily in U.S. equities demonstrating accelerating growth, increasing profitability, or above-average growth or growth potential compared to the overall economy;
  • Franklin Technology Tax Class: Capital appreciation by investing primarily in equity securities of technology companies located in the U.S. and throughout the world;
  • Franklin World Growth Tax Class: Long-term capital appreciation by investing primarily in equity securities of growth companies with any market size capitalization, which are located throughout the world.

The proposed mergers will take effect on or around October 21.