Franklin Templeton unveils Global Aggregate Bond

Franklin Templeton has launched a total return bond fund into its Luxembourg-domiciled Sicav.

The Templeton Global Aggregate Bond fund aims to maximise total returns, delivered through a combination of income and capital growth, by investing in debt issued by corporations and governments worldwide.

Benchmarked against the Barclays Capital Global Aggregate index, the fund invests mainly in investment grade securities, but may invest up to 10% in non-investment grade debt.

The fund is managed by London-based John Beck and David Zahn, senior vice presidents of Franklin Templeton Fixed Income Group’s international bond department.

Based on a strategy that has been available to institutional investors for the past decade, Beck and Zahn will target returns through bottom-up stockpicking and identifying market inefficiencies, and will hold a large number of small, low correlation active positions.

The managers will aim to add value through country and duration positioning, as well as currency and sector allocation.

“We believe with the recent focus on currencies and global interest rates there are good opportunities for investors outside their home countries,” Zahn says.

“We think Franklin Templeton is especially well positioned to take advantage of these opportunities given its global footprint, significant bottom-up resources, and integrated quantitative group.

“This approach allows us to identify market inefficiencies and build a diversified set of holdings while using a disciplined risk management process.”

The Templeton Global Aggregate Bond fund is based in US dollars but has a sterling hedged share class.

Minimum investment is $5,000 while the AMC is 0.95% and the initial charge is up to 3%.