Franklin Templeton unveils new bond funds

Franklin Templeton Investments has been given FSA approval to launch two new fixed income funds.

The Templeton Global Total Return Bond and Templeton Strategic Bond funds opened to investors yesterday, and will be run from the London office by John Beck, senior vice president.

The Global Total Return Bond fund will invest in fixed and floating rate debt securities of government and corporate issuers worldwide. The fund will have a diversified portfolio across a wide range of fixed income markets and vehicles. It will have the ability to move globally across different fixed interest asset classes and currencies and the flexibility to position itself to find total return opportunities in a range of business, interest rate and currency cycles.

The Strategic Bond fund will invest at least 80pc of the portfolio in sterling-denominated securities (or hedged back to sterling) worldwide and approximately 20pc in below BBB minus, convertibles and income producing preference shares. It will aim to deliver an estimated net yield of 5pc.

Beck will be supported by California-based Michael Hasenstab, senior vice president and co-director on the Global Total Return Bond fund, and London-based David Zahn, senior vice president and portfolio manager on the Strategic Bond fund.

Jamie Hammond, senior director, global advisor services, at Franklin Templeton Investments commented: "The Templeton Global Total Return Bond fund is suitable for investors seeking total returns from an unconstrained portfolio that is diversified across a wide range of countries and fixed income asset classes. On the other hand, the Templeton Strategic Bond Fund will appeal to investors looking for a regular income from their investments whilst also aiming to preserve capital over the medium to long-term.

"We are particularly excited about the new Templeton Global Return Bond Fund as it will employ a similar investment strategy to the Luxembourg-registered Templeton Global Total Return SICAV."

Since launch in 2003 the Luxembourg fund has returned 68.5pc, beating the Morningstar Fixed Income Global sector average of 32.9pc.