Franklin Templeton announced today the launch of Franklin Long Duration Credit Fund, which seeks to maximize risk-adjusted returns through a combination of income and capital appreciation. The Fund, which was established based on client interest, is designed to offer exposure to longer maturity investment grade fixed income securities and provides investors access to this type of strategy, which is more commonly offered in separately managed accounts or comingled trust vehicles.
The Fund is managed by Franklin Templeton Fixed Income portfolio managers Josh Lohmeier, CFA, Michael Cho, CFA and George Bailey, CFA. The investment team uses a proprietary portfolio construction approach seeking to produce an additional source of alpha alongside sector allocation and security selection and strives for a lower correlation to the benchmark through a custom sector framework and distinctive risk/return profile.
“Portfolio construction sets this strategy apart from peers and is a key driver of non-correlation,” said Lohmeier. “Our time-tested process strives to add value by creating a more efficient portfolio and allocating to the best credit ideas. Risk management is considered at all stages of the portfolio construction process, and portfolios are stress tested to ensure they are structurally designed to mitigate risks and deliver more favorable outcomes in adverse credit markets.”
Franklin Long Duration Credit Fund will invest at least 80 percent of its net assets in fixed income securities predominantly in US dollar-denominated, investment grade securities—although they may be issued by a foreign corporation, a US affiliate of a foreign corporation, a foreign government or its agencies and instrumentalities or a supranational organization. The Fund’s investments may include various types of bonds and debt securities, including corporate bonds, notes, US money market securities, municipal securities, US government and agency obligations, cash, private placements and restricted securities. The Fund may also enter into exchange-traded derivative transactions, consisting of investments in US Treasury future contracts, for hedging purposes and to manage duration or cash flows.
The Fund will seek to maintain a dollar-weighted average effective portfolio duration within one year (plus or minus) of the portfolio duration of the securities comprising the Fund’s benchmark, the Bloomberg US Long Credit Index. Under normal circumstances, the dollar-weighted average portfolio maturity of the Fund is expected to be more than 10 years.
Franklin Templeton Fixed Income has $137 billion in assets under management, with approximately $25 billion of that in corporate credit strategies, as of July 31, 2023. It’s Corporate Credit Research Team comprises 34 investment professionals globally, organized by region.
Firmwide, Franklin Templeton has over $508 billion in fixed income assets globally across its various specialist investment managers as of July 31, 2023.
About Franklin Templeton
Franklin Resources, Inc. [NYSE: BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 155 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.4 trillion in assets under management as of July 31, 2023. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.
What about risks?
All investments involve risks, including possible loss of principal. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated. These and other risks are discussed in the fund's prospectus. Before investing, carefully consider a fund’s investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at www.franklintempleton.com. Please read it carefully.
Before investing, carefully consider a fund’s investment objectives, risks, charges and expenses. You can find this and other information in each prospectus, or summary prospectus, if available, at www.franklintempleton.com. Please read it carefully.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE.
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