Templeton Global Total Return Fund

52 Pages·2017·1.6 MB·English

Templeton Global Macro
Dataasof30June2019
Franklin Templeton Investment Funds
Templeton Global Total Return Fund - A (acc) USD
Forprofessionalinvestoruseonly.Notfordistributiontoretailinvestors.
TempletonGlobal Total ReturnFund
Table of Contents
Investment Capabilities Overview............................................................................................4 Country Research Can Help to Identify Potential Alpha Sources............................................23
Franklin Templeton—A Trusted, Long-Term Partner in Investment Management.......................5 Portfolio Construction............................................................................................................24
Templeton Global Macro—Assets Under Management............................................................6 Portfolio Positioning..............................................................................................................25
Fund Description....................................................................................................................7 Case Study: Ireland..............................................................................................................26
Fund Overview.......................................................................................................................8 Summary of Advantages.......................................................................................................27
A Record of Strong Performance.............................................................................................9 Summary..............................................................................................................................28
Relatively Low to Moderate Correlations Historically to Other Asset Classes..........................10 What are the Key Risks?......................................................................................................29
Discrete Performance...........................................................................................................11 Portfolio Characteristics........................................................................................................30
Prolonged Advances vs. Moderate Declines..........................................................................12 Geographic Allocation...........................................................................................................31
Historically Attractive Risk/Return Profile Compared to Other Asset Classes..........................13 Currency Exposure...............................................................................................................32
On-the-Ground Research......................................................................................................14 Sector Allocation...................................................................................................................33
Franklin Templeton Fixed Income..........................................................................................15 Credit Quality Allocation........................................................................................................34
Insight and Information Sharing Around the Globe.................................................................16 Maturity Allocation................................................................................................................35
Templeton Global Macro—A Team of Global Fixed Income Experts........................................17 Historical Performance..........................................................................................................36
Investment Philosophy..........................................................................................................18 Calendar Year Returns.........................................................................................................37
ESG—Going Beyond Traditional Macroeconomic Indicators...................................................19 Performance Risk Statistics..................................................................................................38
A Proprietary ESG Index—TGM-ESGI...................................................................................20
Appendix............................................................................................................39
TGM—ESGI Centers Around 13 Indicators............................................................................21
Investment Process..............................................................................................................22 Management Profiles.......................................................................................40
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TempletonGlobal Total ReturnFund
Table of Contents (continued)
Templeton Global Macro Management Profiles......................................................................41 Franklin Templeton—Environmental, Social and Governance (ESG) Investment ....................62
Integration
Module: Additional Resources........................................................................46 Glossary...............................................................................................................................63
Global Aggregate/EMD Team (New York, London).................................................................47 Important Disclosures...........................................................................................................64
A Specialised Local Asset Management (LAM) Team............................................................48
Fixed Income Policy Committee (FIPC)..................................................................................49
Module: Performance Attribution...................................................................50
Three Sources of Potential Alpha Over Time..........................................................................51
Module: Process Implementation Examples.................................................52
Navigating Global Divergence...............................................................................................53
Active Duration Management................................................................................................54
Sector and Duration Strategy................................................................................................55
Environmental, Social & Governance............................................................56
TGM-ESG Index—Scoring Methodology................................................................................57
Developed Countries Usually Exhibit Higher ESG Scores.......................................................58
Strong Relationship between GDP per Capita and ESG Score...............................................59
TGM-ESGI—Favouring Flat or Improving ESG Scores Rather Than Current Levels................60
Franklin Templeton—ESG and Corporate Sustainability.........................................................61
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TempletonGlobal Total ReturnFund
Investment Capabilities Overview
FRANKLIN TEMPLETON
TotalCombinedAssetsUnderManagement:US$715.2Billion
2 Equity 5 Fixed Income 8 Multi-AssetSolutions 11 Alternatives
AUM US$289.2Billion US$269.8Billion US$116.0Billion US$42.2Billion
CAPABILITIES • Value • Government • Multi-AssetIncome • Commodities
• DeepValue • Municipals • DiversifiedOutcome-Oriented • Infrastructure
• CoreValue • CorporateCredit • RiskPremia • RealEstate
• Blend • BankLoans • SmartBeta • HedgeFunds
• GARP • Securitised • BalancedAllocation • PrivateEquity
• Growth • Multi-Sector • TargetDate/Risk • PrivateDebt
• Convertibles • Currencies • ModelPortfolios
• Sector • Sukuk • InflationProtection
• Shariah • ManagedVolatility
• SmartBeta
INVESTMENT • TempletonGlobalEquityGroup(1940) • FranklinTempletonFixedIncomeGroup(1970) • FranklinTempletonMulti-AssetSolutions(1948) • FranklinRealAssetAdvisors(1984)
TEAMS • FranklinEquityGroup(1947) • TempletonGlobalMacro(1986) • FranklinSystematic(2011) • DarbyOverseasInvestments(1994)
• FranklinMutualSeries(1949) • FranklinLAM-FixedIncome(1993) • K2Advisors(1994)
• FranklinTempletonEmergingMarketsEquity(1987) • Pelagos(2005)
• FranklinLAM-DevelopedMarketsEquity(1993) • BenefitStreetPartners(2008)
• EdinburghPartners(2003)
Source:FranklinTempletonInvestments(FTI),asof30June2019,basedonlatestavailabledata.TotalcombinedAssetsUnderManagement(TotalAUM)combinesU.S.andnon-U.S.AUMoftheinvestmentmanagementsubsidiariesoftheparent
company,FranklinResources,Inc.(FRI)[NYSE:BEN],aglobalinvestmentmanagementorganisationoperatingasFTI.OnlyselectedbusinessentitieswithinFTIclaimcompliancewiththeGIPSstandardsasdescribedinthetableofcontentsif
applicable.TotalandplatformAUMincludesdiscretionaryandnon-discretionaryaccounts,includingpooledinvestmentvehicles,separateaccountsandothervehicles.TotalandplatformAUMmayalsoincludeadvisoryaccountswithorwithouttrading
authority.Inaddition,assetsforwhichcertainFTIadvisersprovidelimitedassetallocationadvisoryservices,andassetsthatarenotallocatedtoFTIproductsarenotincludedintheAUMfiguresshown.FranklinTempletonMulti-AssetSolutionsmay
investinvariousinvestmentplatformsadvisedbyanumberofinvestmentadvisoryentitieswithinFTI.PlatformAUMreportedforFTMulti-AssetSolutionsthereforemayincludecertainAUMseparatelyreportedundereachutilisedinvestmentplatform.
TotalAUMalsoincludesassetsmanagedbycertainFTIadvisersthatdonotformpartoftheselectedinvestmentplatformsshown.Asaresult,thecombinedplatformAUMsmaynotequalTotalAUMandmaybecalculatedandreportedseparatelyfor
regulatoryorotherpurposesundereachinvestmentadviser.EachlocalassetmanagermaybeconsideredasanentityaffiliatedwithorassociatedtoFTIbyvirtueofbeingadirectorindirectwholly-ownedsubsidiaryofFRI,anentityorjointventurein
whichFRIownsapartialinterest,whichmaybeaminorityinterest,orathirdpartyassetmanagementcompanytowhichinvestmentadvisoryserviceshavebeendelegatedbyanFTIadviser.
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TempletonGlobal Total ReturnFund
Franklin Templeton—
A Trusted, Long-Term Partner in Investment Management
Franklin Templeton—A Trusted, Long-Term Partner in Investment Management
Investment excellence
• Diverse investment solutions across multiple asset classes
• Time-tested investment disciplines plus exceptional research enables strong long-term performance
potential
• Integrated, comprehensive and proven approach to investment risk management
• Committed to environmental, social and governance (ESG) investment integration
Global perspective, local expertise
• Pioneer in global investing, with track record of innovation
• Unmatched breadth and depth of global presence
• Deep experience and long-term commitment to the markets we enter
Strength and experience
• Over 70 years of navigating well through all market cycles
• Global business diversified by investment objective, geography and client type
• Values-driven culture guides how we work
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TempletonGlobal Total ReturnFund
TTeemmpplleettoonn GGlloobbaall MMaaccrroo——AAsssseettss UUnnddeerr MMaannaaggeemmeenntt
Templeton Global Macro has managed unconstrained strategies since 1986
Assets Under Management
Billions (USD) as of 30 June 2019
Other
Emerging Markets
$0.8
Debt
$16.5
Templeton Global
Macro Total Assets:
$115 billion
Global Multi-Sector Global Sovereign
$37.3 $60.6
Source: Franklin Templeton Investments (FTI), as of 30 June 2019 unless otherwise noted, based on latest available data. Total combined Templeton Global Macro Assets Under Management (Total Templeton Global Macro AUM) combines the U.S.
and non-U.S. AUM of the investment management subsidiaries of the parent company, Franklin Resources, Inc. (FRI) [NYSE: BEN], a global investment organisationoperating as FTI. AUM includes discretionary and advisory accounts, including
pooled investment vehicles, separate accounts and other vehicles, as well as some accounts that may not be eligible for inclusion in composites as defined by the firm’s policies. AUM may also include advisory accounts with or without trading
authority. In addition, assets for which certain FTI advisers provide limited asset allocation advisory services, and assets that are not allocated to FTI products are not included in the AUM figures shown.
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TempletonGlobal Total ReturnFund
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Seeks to:
• Maximise, consistent with prudent investment management, total investment return consisting
of a combination of interest income, capital appreciation and currency gains
• Capitalise on the large, expanding opportunity set in global bonds
• Capture potential alpha opportunities in global fixed income and currencies
• Achieve solid, long-term, risk-adjusted returns in diverse market conditions
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TempletonGlobal Total ReturnFund
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Investment Objectives1
• Seek to maximise, consistent with prudent investment management, total investment return consisting of a combination of interest
income, capital appreciation and currency gains
• Take advantage of an unconstrained worldview independent from its benchmark—the Bloomberg Barclays Multiverse Index
• Seek to maintain a portfolio risk profile commensurate with the volatility of the benchmark
Investment Focus
• Invest in global debt securities and global currencies across all sectors and utilises active currency management
• Limit below-investment grade securities exposure
• May include allocations to both developed and emerging markets
Potential Sources of Value Added
• May utilise three independent sources of alpha potential:
– Yield Curve
– Currencies
– Credit
1.Thereisnoassurancethatthestrategywillachieveitsinvestmentobjectives.Asstatedabove,thestrategyismanagedinabenchmarkunconstrainedmanner.
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TempletonGlobal Total ReturnFund
A Record of Strong Performance
TempletonGlobalTotalReturnFund-A(acc)USD
vs.BloombergBarclaysMultiverseIndex
MonthlyRolling3-YearAnnualisedReturns DiscreteAnnualPerformance(%)
31August2006to30June2019 Asof30June2019
23% 06/18 06/17 06/16 06/15 06/14
et OUTPERFORMED 06/19 06/18 06/17 06/16 06/15
N
—
D TempletonGlobalTotalReturnFund-A(acc) 5.73 -3.59 12.54 -6.92 -3.33
S
U USD—NetofFees
c) 16%
c
(a BloombergBarclaysMultiverseIndex 6.01 1.34 -1.38 8.62 -7.10
A
-
d
n
u 9%
ReturnFofFees AAsnnoufa3l0isJeudneTo2t0a1l9Returns(%)
otal 2% IncepDtiaotne 3Yrs 5Yrs 10Yrs
T
al
b TempletonGlobalTotalReturnFund-A(acc) 29.8.2003 4.68 0.63 5.70
o UNDERPERFORMED
Gl USD—NetofFees
on -5%
et -5% 2% 9% 16% 23% BloombergBarclaysMultiverseIndex 1.95 1.35 3.13
pl
m Bloomberg Barclays Multiverse Index
e
T
TempletonGlobalTotalReturnFund-A(acc)USDoutperformedthe
BloombergBarclaysMultiverseIndex126outofthe155monthlyrolling3-year
periodsshown
AllperformancedatashownisintheFundcurrencystatedandnetofmanagementfees.Saleschargesandothercommissions,taxesandotherrelevantcostspaidbytheinvestorarenotincludedinthecalculations.
Performancedatamayrepresentblendedshareclassperformance,e.g.,hybridcreatedfromanA(dis)shareclasswhichwasconvertedtoA(acc).
Thefundoffersothershareclassessubjecttodifferentfeesandexpenses,whichwillaffecttheirperformance.Pleaseseetheprospectusfordetails.
Whenperformanceforeithertheportfoliooritsbenchmarkhasbeenconverted,differentforeignexchangeclosingratesmaybeusedbetweentheportfolioanditsbenchmark.
Annualizedrollingperiodsareplottedonamonthlyorquarterlybasisasindicated.Theleadingdiagonallinelinkspointsofreturnfortheindex(loweraxis).Foreverypointofreturnalongthislinethereisacorrespondingreturnforthefundrepresentedby
thebluesquare(leftaxis).Anypointabovethelinerepresentsoutperformancerelativetotheindexforthatperiod.Anypointbelowthelinerepresentsunderperformancerelativetotheindexforthatperiod.
ThevalueofsharesintheFundandincomereceivedfromitcangodownaswellasup,andinvestorsmaynotgetbackthefullamountinvested.Pastperformanceisnotanindicator
oraguaranteeoffutureperformance.Currentperformancemaydifferfromfiguresshown.Currencyfluctuationsmayaffectthevalueofoverseasinvestments.Wheninvestinginafund
denominatedinaforeigncurrency, performancemayalsobeaffectedbycurrencyfluctuations.Pleasevisitwww.franklinresources.com/countriesforcurrentperformance.
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TempletonGlobal Total ReturnFund
Relatively Low to Moderate Correlations Historically to Other Asset Classes
Templeton Global Total Return Fund –A (Mdis) USD
5-Year Rolling Correlations
Period Ending 30June2019
5 Years Ending 30/06/2019
1.00 U.S. Bonds -0.22
High Yield Bonds 0.46
0.75
Emerging Markets Sovereign Debt 0.38
0.50 U.S. Stocks 0.39
World Stocks1 0.45
0.25
FX Carry 0.40
Hedge Funds 0.37
0.00
Commodities 0.25
-0.25
8999900001111222233334444555566667777888899
0000011111111111111111111111111111111111111
Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-Sep-Dec-Mar-Jun-
U.S. Bonds High Yield Bonds Emerging Markets Sovereign Debt
U.S. Stocks World Stocks¹ FX Carry
Hedge Funds Commodities
Correlation: 1 = perfect positive correlation 0 = no correlation -1 = perfect negative correlation
1.Source:MorganStanleyCapitalInternational(MSCI).AllMSCIdataisprovided“asis.”InnoeventshallMSCI,itsaffiliatesoranyMSCIdataproviderhaveanyliabilityofanykindinconnectionwiththeMSCIdataortheinformationdescribedherein.
CopyingorredistributingtheMSCIdataisstrictlyprohibited.
Sources:Bloomberg,FTSE,JPMorgan,Standard&Poor’s,DeutscheBank,HedgeFundResearch,Inc.STANDARD&POOR’S®,S&P®andS&P500®areregisteredtrademarksofStandard&Poor’sFinancialServicesLLC.
Standard&Poor’sdoesnotsponsor,endorse,sellorpromoteanyS&Pindex-basedproduct.Theabovechartisforillustrativeanddiscussionpurposesonly.U.S.BondsarerepresentedbytheBloombergBarclaysU.S.AggregateIndex;U.S.Stocks
arerepresentedbytheS&P500Index;HedgeFundsarerepresentedbytheHFRIFundWeightedCompositeIndex;HighYieldBondsarerepresentedbythe FTSEHighYieldMarketLocalCurrencyIndex;WorldStocksarerepresentedbytheMSCI
WorldIndex;CommoditiesarerepresentedbytheS&PGSCIOfficialCloseIndex;EmergingMarketsSovereignDebtarerepresentedbytheJPMorganEmergingMarketsBondIndexEMBIGlobalComposite;FXCarryarerepresentedbytheDeutsche
BankG10CurrencyFutureHarvestIndex.Theinformationishistoricalovertheindicatedtimeperiodandmayvarysignificantlyoverotherpasttimeperiods.
Indexesareunmanaged,andonecannotinvestdirectlyinanindex.Theydonotreflectanyfees,expensesorsalescharges.
Pastperformanceisnotanindicatororaguaranteeoffutureperformance.
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