Franklin Templeton Investments Corp. today introduced two new funds to meet the growing demands among Canadian investors for tax-efficient income. Franklin Templeton Managed Yield Class fund and Franklin Templeton Short-Term Yield Class fund are designed to increase after-tax yield by using forward contracts to provide capital gains instead of interest income.

“Canadians want to invest in income solutions and avoid the drawback that interest income is fully taxable,” said Don Reed, president and CEO, in a news release.. “These new funds are an ideal solution for investors looking for the stability of income and the tax efficiency of capital gains.”

Franklin Templeton Managed Yield Class fund is focused on providing a return similar to its reference fund, Bissett Bond Fund; and Franklin Templeton Short-Term Yield Class fund is focused on providing a return similar to its reference fund, Franklin Templeton Money Market Fund.

“By entering into forward contracts that are tied to the performance of the reference funds, the new funds are positioned to increase after-tax yield,” said Reed.

Guy Le Blanc, Lead Manager of the reference funds: Bissett Bond Fund and Franklin Templeton Money Market Fund, will also manage both new funds.

The new funds are part of Franklin Templeton’s Corporate Class structure, which allows investors to switch between funds and portfolios while deferring taxable events until they redeem from the structure.