SOURCE: Franklin Templeton

Franklin Templeton

September 07, 2011 11:00 ET

Franklin Templeton Highlights Importance of Risk Management

New Educational Guide Discusses Hidden Risks That Could Impact a Portfolio

SAN MATEO, CA--(Marketwire - Sep 7, 2011) - According to a recent Franklin Templeton Investments survey, 93 percent of respondents said risk management expertise is important when selecting an investment manager.1 In an effort to educate investors on the importance of risk management for asset managers, Franklin Templeton Investments has published an informational guide titled "Uncover Five Hidden Risks That Could Impact Your Portfolio".

The guide outlines the following five types of investment risk and demonstrates how Franklin Templeton navigates those risks:

1) Hidden Portfolio Concentration
2) (Mis)Use of Derivatives & Complex Securities
3) Global/Emerging Markets Risk
4) Concentrated Exposure to Counterparties
5) "Tunnel Vision"

"As demonstrated by our recent survey, investment risk management is on investors' minds. In times of significant market volatility, investors often react by shifting assets to investments perceived to be 'safer,' such as money market funds, short-term Treasuries or gold. But 'playing it safe' can actually expose investors to different risks," said Wylie Tollette, senior vice president for investment risk and performance at Franklin Templeton Investments.

"Risk comes in many different forms, including having a portfolio that is too concentrated, very exposed to inflation, or with limited potential to achieve investment goals over the long term. Gaining a better understanding of investment risks, and how a global asset manager like Franklin Templeton navigates them, can give an investor important perspective as they partner with their financial advisor and examine their own portfolios," Tollette continued.

Franklin Templeton's website features additional content highlighting the company's comprehensive and integrated risk management approach, which is designed to ensure that investment risks are recognized, rational and rewarded:

  • Recognized -- We strive to ensure that risks are recognized and understood at the security, portfolio and operational level.
  • Rational -- Risk decisions are an intended and rational part of each portfolio's strategy.
  • Rewarded -- We seek to ensure that every risk has an opportunity for a commensurate reward.

"A focus on investment risk has been a hallmark of our investment approach throughout our history," said Tollette. "Franklin Templeton's team of dedicated risk management specialists works side-by-side with our investment teams around the world to evaluate risk at each step in the investment process and seeks to align risk considerations with the portfolio manager's investment convictions."

Franklin Templeton Distributors, Inc. is a wholly-own subsidiary of Franklin Resources, Inc. (NYSE: BEN), a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over $747 billion in assets under management as of July 31, 2011. For more information, please call 1-800/DIAL BEN® or visit franklintempleton.com.

1. The Franklin Templeton Investments online survey, conducted by The Wall Street Journal Marketing Department through its Opinion Leaders Research Panel, comprised responses from 1,197 individuals out of a randomly selected sample of 3,000 panel members. The survey was completed from March 16 to 25, 2011.

Copyright © 2011. Franklin Templeton Investments. All rights reserved.

Contact Information

  • Contact:

    Franklin Templeton Investments
    Corporate Communications:

    Bill Weeks
    (212) 632-3204

    Matt Walsh
    (650) 312-2245

    franklintempleton.com