SOURCE: Franklin Templeton

Franklin Templeton

August 04, 2015 10:31 ET

Franklin Templeton Investments Launches Franklin Flexible Alpha Bond Fund

Designed to Navigate Fixed Income Risks and Seeks to Capitalize on Global Market Opportunities

SAN MATEO, CA--(Marketwired - Aug 4, 2015) - Franklin Templeton Investments today announced the launch of Franklin Flexible Alpha Bond Fund ("the fund") (NASDAQ: FABFX), which aims to provide attractive risk-adjusted total returns over a full market cycle by allocating its portfolio across a broad range of global fixed income sectors.

"Given the recent concerns with respect to rising interest rates and the related desire for additional diversification in the fixed income markets, we believe Franklin Flexible Alpha Bond Fund should fulfill investors' rapidly growing demands for an alternative to traditional core fixed income allocations," said the fund's co-lead manager, Michael Materasso, senior vice president and co-chair of the Franklin Templeton Fixed Income Policy Committee. "The fund seeks to complement traditional fixed income asset classes by potentially providing low correlation to conventional holdings."

The fund aims to provide attractive risk-adjusted returns generated from various sources -- other than primarily from interest rates -- by allocating the fund's portfolio across various risks such as credit, currency, and duration risks. In employing this strategy, the fund's portfolio managers will have the flexibility to invest across all sectors of fixed income of any country, sector, quality, maturity or duration, and without reference to a benchmark index. 

The fund's management team uses a "top-down" analysis of macroeconomic trends, combined with "bottom-up" fundamental analysis to identify potential investment opportunities. In selecting investments for the fund, the managers choose securities in various market sectors based on their assessment of changing economic, market, industry and issuer conditions. As part of their risk management strategy, the fund managers may actively employ long and short positions to navigate market cycles and tactically manage broad market risks from interest rate, credit, currency and country exposures.

"We take an unconstrained investment approach with dynamic sector rotation, active currency management, security selection and relative value positioning, while aiming to manage various risks, such as duration," says the fund's co-lead manager David Yuen, CFA1, FRM2, senior vice president and director of quantitative strategy and risk management for Franklin Templeton Fixed Income Group. 

The fund seeks to provide total return through a combination of current income and capital appreciation by investing at least 80 percent of its net assets in bonds and investments that provide exposure to bonds, including global debt obligations of any credit quality, maturity or duration, and derivatives and other instruments that provide exposure to bonds.

Materasso and Yuen have 42 and 26 years of industry experience, respectively, and are supported by the breadth and depth of Franklin Templeton Fixed Income capabilities -- with a combined 170 investment professionals worldwide and over $335 billion3 in fixed income assets under management. The fund management team is further aided by a separate risk management team, which partners with managers to analyze and monitor portfolio risk.

Important Information about the Fund

All investments involve risk, including possible loss of principal. Changes in the financial strength of a bond issuer or in a bond's credit rating may affect its value. Interest rate movements and mortgage prepayments will affect the fund's share price and yield. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund's share price may decline. The risks associated with higher-yielding, lower-rated securities (commonly called junk bonds) include higher risk of default and loss of principal. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the fund to participate in losses (as well as enable gains) in an amount that exceeds the fund's initial investment. The fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as intended. Investments in foreign securities involve risks such as currency fluctuations, and political and economic uncertainty. These and other risk considerations are discussed in the fund's prospectus.

Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN /(800)342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.

About Franklin Templeton Investments

Franklin Templeton has been managing fixed income assets since 1948 and dedicated fixed income mutual funds since 1970. During that time, it has become a global leader in fixed income investing with over $335 billion3 in fixed income assets under management. Franklin Templeton's funds cover the entire fixed income spectrum, including government securities, municipal bonds, corporate bonds, floating-rate loans, global bonds and multi-sector strategies that capitalize on the company's expertise in each of these areas.

The fund's principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned 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 to retail, institutional and sovereign wealth clients in over 150 countries. Through specialized teams, the Company has expertise across all asset classes -- including equity, fixed income, alternative and custom solutions. The Company's more than 600 investment professionals are supported by its integrated, worldwide team of risk management professionals and global trading desk network. With offices in 35 countries, the California-based company has more than 65 years of investment experience and over $866 billion in assets under management as of June 30, 2015. For more information, please visit franklintempleton.com.

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1. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
2. FRM is a trademark owned by the Global Association of Risk Professionals, Inc. (GARP).
3. As of June 30, 2015.

Copyright © 2015. Franklin Templeton Investments. All rights reserved.

Contact Information

  • Contact:
    Franklin Templeton Investments
    Corporate Communications:
    Becky Radosevich
    (212) 632-3207
    franklintempleton.com