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Franklin Templeton launches multi-asset real return fund for US investors


Franklin Templeton Investments has launched Franklin Templeton Multi-Asset Real Return Fund for US investors. The new fund combines the distinct investment expertise of several Franklin Templeton investment management teams with the multi-asset management expertise of the Franklin Templeton Multi-Asset Strategies (FTMAS) group.

"Franklin Templeton Multi-Asset Real Return Fund’s approach can be an attractive solution for investors seeking the benefits of diversification within a single portfolio that taps the investment expertise across Franklin Templeton’s investment platforms," says Thomas A Nelson, director of quantitative research and portfolio manager for FTMAS, who is the co-lead manager of the Fund with Tony Coffey, vice president and portfolio manager. "The Fund’s active adjustment of portfolio allocations to address current inflationary environments also can make it an attractive option for investors who are concerned about inflation."

The Fund seeks total return that exceeds US inflation over a full inflation cycle (real return), typically five years, by using a flexible allocation strategy that is diversified across a broad spectrum of asset classes, including global equities, global fixed income (including Treasury Inflation-Protected Securities or "TIPS"), and commodities. To help protect against inflation risk, the Fund pairs a diversified multi-asset class portfolio with an analysis of the current inflationary environments. The portfolio will be adjusted to overweight asset classes that have historically performed well under inflation conditions similar to the existing environment. To help achieve its strategy, the Fund invests primarily in other mutual funds (underlying funds), predominantly other Franklin, Templeton and Mutual Series funds; it also invests a portion of its assets directly in TIPS.

The Fund also includes allocations to Franklin Pelagos Commodities Strategy Fund and Franklin Pelagos Managed Futures Strategy Fund, providing additional diversification through two asset classes that traditionally have exhibited lower correlations to equities and fixed income. Both Pelagos funds are US-registered mutual funds, currently available only through Franklin Templeton mutual funds (not direct to the public). Franklin Templeton purchased a 20 per cent stake in Boston-based alternatives specialist Pelagos Capital Management in November 2010.

"Franklin Templeton Multi-Asset Real Return Fund is an important addition to FTMAS’ diverse range of outcome-oriented investment solutions, including the Franklin Templeton Global Allocation Fund launched late last year, and our long-established target date and target risk funds," says FTMAS chief investment officer Brent Smith.

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