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Aimee Corsiglia
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Sydney, 27 May 2021 – Franklin Templeton, one of the world’s largest investment managers, today announced that the Franklin Australian Absolute Return Bond Fund has passed a significant milestone, attracting $1 billion of funds under management from Australian investors.
Launched in December 2014, the Fund’s combination of attractive returns and strong risk management proved appealing to investors during the Covid-19 pandemic. Funds under management hit $500 million in July 2020 and then doubled in a period of ten months since then.
Franklin Templeton Managing Director of Australia Fixed Income, Chris Siniakov, says the historically low rates in Australia and many parts of the world will continue to impact savers as economies recover from the Covid-
19 pandemic.
“The current interest rate environment is here for some time and is creating challenges for investors seeking defensive returns without taking inappropriate risk,” notes Siniakov.
“The Fund fits in this niche, aiming to combine multiple lowly correlated alpha sources to deliver returns above the cash rate without overly relying on credit and yield based strategies.”
The Fund is an actively managed portfolio of fixed income securities, designed to deliver defensive, stable returns through the interest rate and credit cycles while protecting against volatility through strong risk management. It is benchmarked against the Bloomberg AusBond Bank Bill Index.
Over the five-year period to April, the Fund has produced an average annual return of 3.44% (net of fees), versus a benchmark return of 1.36% per year over the same period. Absolute returns have been relatively consistent with positive performance nearly 90% of the time on a quarterly rolling basis.
Close to half the Fund’s investments are in investment-grade corporate bonds and close to 40% are in government securities. Currently, the Fund has no exposure to high-yield or riskier credit.
The Fund has received ‘Recommended’ Ratings from both Zenith and Lonsec research houses and is available on most investment platforms.
Matthew Harrison, Managing Director of Franklin Templeton Australia and New Zealand, says, “We’re pleased with the momentum seen in this strategy and growth of the broader business in Australia. At Franklin Templeton, our whole focus is on delivering better outcomes for our clients and we are grateful for their ongoing support through a turbulent market environment.”
“With cash yielding extremely low rates of return and increasing concerns about inflation, we’re hearing from many investors concerned about the erosion of their wealth in inflation-adjusted terms. They are looking for ways to generate real returns and consistent income streams, but some are concerned about the level of risk in the broad fixed income and equity markets,” notes Harrison.
“A defensive, absolute return approach to fixed income is proving attractive in this environment.”
Performance (AUD %, W Class, net of fees)
As at 30 April 2021
| 1 Yr | 3 Yrs | 5 Yrs |
Since Inception (22/12/2014) |
|
| Franklin Australian Absolute Return Bond Fund |
4.82 | 3.56 | 3.44 | 3.21 |
| Bloomberg AusBond Bank Bill Index |
0.07 | 1.06 | 1.36 | 1.57 |
Further information on the Fund is available here.
For all media queries, please contact Simrita Virk
E: [email protected]
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organisation with subsidiaries operating as Franklin Templeton and serving clients in over 165 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 brings extensive capabilities in equity, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has over 70 years of investment experience. In July 2020, Franklin Templeton completed the acquisition of Legg Mason, Inc. [NYSE:LM] and its specialist investment managers. The newly-combined organisation establishes Franklin Templeton as one of the world’s largest
independent, specialised global investment managers with a combined approximately US$1.5 trillion in assets under management (AUM) across one of the broadest ranges of high-quality investment teams in the industry
as of 30 April 2021. For more information, please visit www.franklintempleton.com.au.
Disclaimers
Franklin Templeton Investments Australia Limited (ABN 87 006 972 247) (Australian Financial Services Licence Holder No. 225328) issues this publication for information purposes only and not investment or financial product advice. It expresses no views as to the suitability of the services or other matters described herein to the individual circumstances, objectives, financial situation, or needs of any recipient. You should assess whether the information is appropriate for you and consider obtaining independent taxation, legal, financial or other professional advice before making an investment decision. A disclosure document for any Franklin Templeton funds referred to in this document is available from Franklin Templeton at Level 19, 101 Collins Street, Melbourne, Victoria, 3000 or www.franklintempleton.com.au or by calling 1 800 673 776.
The rating issued 10/2020 is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2021 Lonsec. All rights reserved.
The Zenith Investment Partners (ABN 27 103 132 672, AFS Licence 226872) (“Zenith”) rating (assigned 05/2020) referred to in this piece is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past
performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines
Copyright © 2021. Franklin Templeton Investments Australia Limited. All rights reserved.