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Title Speaker Date


Dr. Michael Hasenstab in Kiev, Ukraine

Apr 05, 2014

Featuring:  Dr. Michael Hasenstab, Franklin Templeton Executive Vice President, CIO, Global Bonds

  • What attracted us to Ukraine was a number of factors: first, the long-term potential of the country. There’s a wealth of human capital and of agricultural endowment there, and Ukraine is strategically in a very important position vis-à-vis Europe and the East.
  • I think the current government has done an exceptional job of tackling not just the short-term issues but really setting a stage for Ukraine to potentially flourish over the next 5 to 10 years by putting in place very difficult, but very important, structural reforms.
  • In response to the crisis in Ukraine, there has been a very cooperative and proactive relationship that has brought together the U.S., Europe, the IMF and the World Bank in a very close dialog to come up with a reform package that has the potential to ensure both the long-term success as well as the short-term solvency or short-term liquidity issues.
  • Now just because the market doesn’t like something, doesn’t necessitate that we do like it. But, we do look for situations that are out of favor when we go to a country.
  • Being on the ground in Kiev, understanding the situation and seeing the long-term potential — that’s why we are invested in Ukraine.
  • Adversity doesn’t define a country. It’s how a people respond to adversity that defines a country.
  • I think the crisis response, the coming together of the people in Ukraine to make steps in the right direction is very encouraging, very heroic in many senses.
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Important Legal Information

The information provided in this video is not a complete analysis of every material fact regarding any region, country, market, industry or security. Holdings are subject to change. Opinions expressed are as of April 5, 2014, and can change without notice. An assessment of a particular country, market, industry, security, investment or strategy is not intended as an investment recommendation; it is intended only to provide insight into the speaker’s views and portfolio selection process.

What Are the Risks?
All investments involve risks, including possible loss of principal.

Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in emerging markets, of which frontier markets are a subset, involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets Because these frameworks are typically even less developed in frontier markets, as well as various factors including the increased potential for extreme price volatility, illiquidity, trade barriers and exchange controls, the risks associated with emerging markets are magnified in frontier markets.

Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in an investment portfolio adjust to a rise in interest rates, the value of the portfolio may decline.

Footnotes

  1. Source: © by International Monetary Fund, December 2013. All Rights Reserved.

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