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Franklin Templeton sets return and volatility targets for three multi-asset funds


Franklin Templeton Investments has amended the objectives for its three Luxembourg-registered multi-asset funds to include return and volatility targets effective 19 June.  

The funds, which are part of the Franklin Templeton Investments Fund (FTIF) range, will also be renamed to better reflect their respective return and volatility targets. 

Jamie Hammond, managing director for Europe, Franklin Templeton Investments, says: “Following the merger of the FTSAF range into FTIF range earlier in March 2015, this recent development is a significant step in shaping Franklin Templeton’s multi-asset fund proposition for international investors. We are seeing increasing demand for outcome-oriented products, which give investors diversification benefits away from traditional asset classes, with clearly stated return and risk objectives to help investors match their investment needs.”

The Franklin Diversified Conservative and Franklin Diversified Balanced funds will aim to achieve long-term capital appreciation and income, targeting an annual return of 2 per cent and 3.5 per cent (net of fees) respectively over the Euro Interbank Offered Rate (EURIBOR) over a rolling three-year period.  The Funds will aim to achieve their objective with annualised volatility ranging, under normal market conditions, between 3 per cent and 5 per cent and between 5 per cent and 8 per cent respectively. 

The Franklin Diversified Dynamic Fund will aim to achieve long-term capital appreciation, targeting a yearly average return of 5 per cent (net of fees) over EURIBOR over a rolling three-year period.  The Fund will aim to achieve its objective with an annualised volatility ranging, under normal market conditions, between 8 per cent and 11 per cent.

The three funds will benefit from an expanded set of investment tools and will be actively managing direct and indirect exposure to equities, fixed income, cash and equivalents, and indirect exposure to “alternative” investments such as real estate, infrastructure and commodities.  They may also use financial derivative instruments for hedging, efficient portfolio management and/or investment purposes.

Frankfurt-based, Matthias Hoppe, senior vice president, Franklin Templeton Solutions, remains on the funds as lead portfolio manager whilst London-based Toby Hayes, vice president, Franklin Templeton Solutions, will be added as a portfolio manager on the investment team.

In addition, the Franklin Multi-Asset Income Fund will be renamed as the Franklin Global Multi-Asset Income Fund and its investment objective will be amended to achieve a level of total return consisting of income and capital appreciation, allowing it to support a steady level of annual distribution.  Effective June 29th, the fund will implement a strategy with half the volatility of global equity markets. 

The Franklin Global Multi-Asset Income Fund does not have a prescribed investment and volatility band but with a broadened investment scope, it will be able to invest up to 100 per cent of its assets in global equity investments or global fixed income.  The overall fund’s exposure to UCITS and other UCIs will be reduced further from 40 per cent to 10 per cent.  The investment team will also invest in other asset classes such as currencies, real estate and other non-traditional or alternative investment strategies, as well as derivatives for efficient portfolio management, investment purposes and hedging.

Effective 29 June, Matthias Hoppe, will assume the role of lead portfolio manager (he was previously co-manager of the fund); and he will be supported by Tom Nelson, senior vice president and portfolio manager, Toby Hayes and Steven Moeller, managing director and portfolio manager, Franklin Templeton Solutions.

With over USD42 billion under management, Franklin Templeton Solutions has more than 25 years’ experience managing multi-asset multi-strategy portfolios globally.  The team’s expertise includes strategic and tactical allocation as well as manager selection. 

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