SAN MATEO, CA--(Marketwired - Sep 12, 2013) - Franklin Templeton Investments today announced the introduction of Franklin Global Government Bond Fund (the "Fund"), investing in global government bond markets with a focus on investment-grade issues.
"At the moment, we believe some bond markets across the globe are offering investors appealing risk-adjusted returns," said John W. Beck, the Fund's co-lead portfolio manager and co-director of Franklin Templeton Fixed Income Group's® global fixed income department. He added, "Default rates on investment-grade government debt have remained near zero. Couple this with the positive trend in global gross domestic product (GDP) growth, the nascent recovery in Europe and the continued fiscal strength of many emerging markets, and we believe this may be an encouraging time for prudent investment in the asset class."
The Fund's focus on investment-grade government debt seeks to exploit these recent market developments. Through a rigorous bottom-up research process, portfolio managers screen for securities with the best prospects for income, capital appreciation and price stability. By concentrating on highly-rated government securities, the Fund has been designed to offer investors a source of portfolio stabilization and diversification. Historically, investment-grade government bonds have shown little correlation with other major asset classes and have tended to experience lower levels of volatility when compared with high-yield issues.
The Fund seeks to maximize total investment return consisting of a combination of interest income and capital appreciation. It seeks to achieve its investment objective by investing in fixed- or floating-rate debt securities and obligations issued by government and government-related entities located throughout the world and by taking opportunistic exposure to other securities, such as corporate bonds and mortgage-backed securities. The Fund may also invest in investment-grade obligations issued by emerging market governments and make limited purchases of below investment-grade securities.
"We allocate investments across the fixed income universe to help reduce risk and maintain flexibility," said David Zahn, CFA1, FRM2, the Fund's co-lead portfolio manager, and senior vice president and head of European Fixed Income for Franklin Templeton Fixed Income Group©. "This approach enhances our ability to capitalize on market shifts and allows us to identify securities with credible prospects for income, capital appreciation and price stability."
Based in London, Beck and Zahn are supported by the full scope of Franklin Templeton's global resources. In addition to their local understanding and insight, the investment team leverages: comprehensive fundamental and quantitative research provided by Franklin Templeton Fixed Income Group's global team of over 150 investment professionals; input from Franklin Templeton's Local Asset Management Group; and risk management, compliance and operations support from the broader Franklin Templeton organization.
All investments involve risks, including possible loss of principal. Changes in interest rates will affect the value of the fund's portfolio and its share price and yield. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund's share price may decline. Special risks are associated with foreign investing, including currency rate fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Changes in the financial strength of a bond issuer or in a bond's credit rating may affect its value. Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which may result in significant volatility and cause the fund to participate in losses (as well as enable gains) on an amount that exceeds the fund's initial investment. The fund may not achieve the anticipated benefits, and may realize losses when a counterparty fails to perform as promised. Currency rates may fluctuate significantly over short periods of time, and can reduce returns. The fund is also non-diversified, which involves the risk of greater price fluctuation than a more diversified portfolio. These and other risk considerations are discussed in the fund's prospectus.
Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN /(800)342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.
The fund's principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned subsidiary of Franklin Resources, Inc. (
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