Franklin Templeton has launched a short duration bond fund for European fixed income head David Zahn.
The Franklin Euro Short Duration Bond fund, co-managed by Rod MacPhee, will invest primarily in short-dated fixed and floating-rate debt securities and corporate and sovereign debt within the eurozone. The manager will also have the flexibility to invest outside European markets.
As well as debt securities, it may purchase securitised debt and certain financial derivative instruments, including index-based financial derivatives, credit default swaps and currency forwards.
Zahn (pictured) said European short duration securities provide opportunity for enhanced returns in a rising interest rate environment: "European short duration fixed income is a growing sector as investors are continuing to seek yield with some level of protection from interest rate risk."
