Toronto-based Franklin Templeton Investments Corp. on Monday announced the launch of Franklin Target Return Fund, which is targeted to Canadian investors seeking a specific return target within an established volatility range.
“During the market downturn in 2008-09, many investors were rattled and moved their investments to cash instruments, like money market funds or GICs. Yet, even after the markets had strong performance, some investors stayed on the sidelines and never returned to investing in equities or fixed income,” says Duane Green, president and CEO, Franklin Templeton, in a statement.
“To address the needs of such Canadian investors, we have developed an outcome-oriented solution that aims to offer consistent short- and long-term growth, together with stabilizing strategies that are intended to offer defensive protection against market downturns,” he adds.
Franklin Target Return Fund’s portfolio management team seeks to achieve risk diversification by focusing on investments with three distinct “asset behaviours” — growth, defensive and stable — and adjusting the portfolio weightings among them to take advantage of market opportunities as they arise.
“With Franklin Target Return fund, we are moving away from thinking in pure asset class terms and more towards investing with risk factors in mind,” says Matthias Hoppe, the fund’s manager, senior vice president and portfolio manager, Franklin Templeton Multi-Asset Solutions, in a statement. “We want to diversify the fund across a wide range of risk factors and ensure that one factor doesn’t overly dominate the portfolio. That way we can achieve a broader diversification, which will help us mitigate risk.”
Hoppe, who is located in Frankfurt, Germany, co-manages the fund with Michael Greenberg, who is located in Toronto. Hoppe, who has more than 17 years of industry experience, is responsible for managing multi-asset portfolios in Europe, including five portfolios with target return and volatility ranges. Greenberg, with 12 years of industry experience, specializes in fixed-income strategy in addition to his co-portfolio management responsibilities for all Canadian-based managed programs.
Franklin Target Return Fund’s objective is to achieve a return of 4%, net of fees, over the FTSE TMX Canada 91-day T-Bill index over a rolling three-year period, regardless of the prevailing market conditions.
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