Franklin Templeton Investments has launched Franklin K2 Global Macro Opportunities Fund for US investors, a multi-manager fund that invests in a variety of global macro strategies sub-advised by institutional-quality hedge strategy managers.
Global macro hedge strategies generally have the widest mandate of all hedge strategies, as managers may take positions across the asset classes of global equities, interest rates, currencies or commodities.
"Against the backdrop of increased global macroeconomic and political uncertainty, many US investors are potentially taking on more equity risk than their goals would dictate, and may be open to looking for new ways to diversify their investment portfolios," says Rob Christian (pictured), a portfolio manager and senior managing director for K2 Advisors, part of Franklin Templeton Solutions. "Global macro strategies can serve as a tool that may help provide diversification benefits in relation to equity markets, especially during periods of market stress."
The Fund invests across global macro hedge strategies with highly flexible mandates that go beyond long-only approaches, targeting opportunities presented by emerging trends and themes in global markets. With this Fund, investors can access a select group of hedge strategy manager sub-advisors in a single diversified portfolio.
Building upon Franklin Templeton's strategic acquisition of alternative solutions provider K2 Advisors in 2012, this new US-registered fund further fills out the firm's liquid alternative fund offerings, which also include the Franklin K2 Long Short Credit Fund (NASDAQ: FKLZX) (Advisor Class) launched in September 2015, and the Franklin K2 Alternative Strategies Fund (NASDAQ: FABZX) (Advisor Class) introduced in 2013.
"With the introduction of the Franklin K2 Global Macro Opportunities Fund, we can now offer retail investors access to additional potential sources of total return," says Brooks Ritchey, a portfolio manager and senior managing director for K2 Advisors. "For investors looking to complement their overall portfolios with a solution that historically has offered lower correlation to equity markets and a diversified, multi-manager approach, we believe this Fund can be an important tool. We are very excited about the potential utility of this Fund in helping equity investors seek to manage investment portfolios through volatile market periods."
Franklin K2 Global Macro Opportunities Fund's goal is to seek to provide capital appreciation over a full market cycle, by allocating the Fund's assets across global macro-focused investment strategies, which are generally concentrated on discovering macroeconomic investment opportunities across numerous markets and investments. The Fund's allocations to these strategies and sub-advisors will reflect the Fund portfolio management team's top-down market views.
The Fund will allocate its assets to a variety of hedge strategy managers selected by K2 Advisors through a rigorous, proprietary due diligence process. The strategies employed by the initial hedge strategy managers may include discretionary and systematic macro strategies.1 The sub-advisors may invest in a wide range of global exchange traded and over the counter derivative instruments that provide the Fund with broad exposure – either long or short – to various asset classes, including equities, fixed income, interest rates, commodities and currencies. The Fund may also hold a wide variety of securities, including equities and various credit instruments, such as sovereign, quasi-sovereign and corporate bonds. K2 Advisors has been allocating to global macro strategies since 2006 and currently manages approximately USD1.6 billion in investments in Global Macro strategies