Toronto-based Franklin Templeton Investments Canada is making changes to its Franklin High Income Fund, the investment manager announced Monday.
Specifically, Franklin Templeton is adding a currency management strategy and reducing fees on certain series.
“Many Canadians are looking for yield in their fixed income portfolios but also want to have flexible currency management to help navigate currency risks and opportunities,” Duane Green, president and CEO, says in a statement. “By having our Franklin Bissett Fixed Income team actively manage the currency hedging strategy for Franklin High Income Fund, the fund now provides Canadian investors currency exposure managed from a Canadian perspective.”
Currently, the fund has a 100% passive currency hedge overlay, but as of Jan. 1, 2019, it will implement a more active approach by reducing the hedge to a base ratio that will be 75% hedged and 25% unhedged. From this base, Franklin Templeton says, the fund will also have the ability to adjust the hedge +/- 25%, based on the investment team’s outlook for the Canadian dollar relative to the US dollar.
Darcy Briggs, senior vice president and portfolio manager, Franklin Bissett, will manage the active currency management strategy for the fund.
Management fee reductions of five basis points will also be made to Franklin High Income Fund’s Series PF and Series O, effective Jan. 1, 2019.
Franklin High Income Fund “seeks to provide investors with high current income and the potential for capital appreciation by investing primarily in higher yielding, lower rated debt securities,” Franklin Templeton says.