Templeton Income Fund Changes Name to Templeton Global Balanced Fund

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Michael Hasenstab and Lisa Myers Scour the Globe for Compelling Fixed Income and Equity Opportunities

 

San Mateo, CA, July 11, 2011 -- Franklin Templeton Investments announced today that Templeton Income Fund has been renamed Templeton Global Balanced Fund. Available to U.S. investors, the fund seeks both current income and capital appreciation by investing in global stocks and bonds. 

As appetites for global investments increase, Templeton Global Balanced Fund allows investors the ease of accessing both global equity and fixed income markets through a single fund, supported by insights from two long-tenured investment teams. According to results from the Franklin Templeton Global Investor Sentiment Survey1 conducted earlier this year, about two-thirds (61 percent) of American respondents believe the best fixed income investment opportunities will not be limited only to the U.S. over the next decade. This percentage rose to nearly three-fourths (73 percent) when respondents considered equity opportunities. 

The Templeton Global Equity Group invests the fund’s equity portion, while the Franklin Templeton Fixed Income Group® invests the fixed income portion. In addition to identifying the individual stocks and bonds to invest in, managers collaborate to determine the fund’s asset allocation, employing a bottom-up assessment of current opportunities combined with top-down macroeconomic analysis to shift the overall asset allocation to take advantage of market inefficiencies.           

Hasenstab’s Outlook on Global Fixed Income Opportunities

“We think interest rates, generally, will rise in 2011, both in fast-growing emerging markets and in the developed world where rates remain at historically low levels,” said Michael Hasenstab, Ph.D., lead manager of the fund’s fixed income portion, and senior vice president/co-director for the Franklin Templeton Fixed Income Group’s international bond department. “Even in the U.S., where we expect the recovery to be moderate, we believe improving economic activity will combine with the historically large financing needs of the public sector to push up yields. We have positioned the fund’s fixed income portion to not only help protect against rising yields, but to potentially capitalize on them. This involves both limiting duration exposure in most economies—we own no U.S. Treasuries or Japanese government bonds—and using currency and other exposures to potentially benefit from rising rates. 

“We continue to favor short maturity bonds in places like Australia, Israel and South Korea where yields between 3 and 5 percent have recently been available on bonds with less than two years of duration and strong creditworthiness in our assessment. These positions are exposed to currency risk, but that exposure could potentially enhance returns. We expect that the currencies of economies with relatively strong growth, where policy is likely to be tightened over the short term, should appreciate against the currencies of the G-3 (U.S. dollar, euro and Japanese yen), where monetary policy is likely to remain loose over an extended period.” 

Myers’ Outlook on Global Equity Opportunities

“We see value in industry-leading companies with diversified revenue streams and well-established pricing power,” said Lisa Myers, CFA®, the fund’s lead equity portfolio manager and executive vice president of the Templeton Global Equity Group. “Large multinational holdings show continued growth potential which is not reflected in their current valuations. Many of Templeton’s European holdings, in particular, source significant portions of their revenues from outside the region, yet investors have been focused only on their fiscally troubled domiciles despite their diversified revenue streams. We remain convinced that these companies have the fundamental strength and premium brand equity that will continue to give them a competitive advantage in markets both at home and abroad. 

“We continue to find attractive values in the global health care sector where demographics, accelerating emerging market health care spending, refocused research and development efforts, and cost cutting opportunities support long-term earnings against well-known pressures, which is not reflected in depressed valuations. Select telecommunications stocks, which have long managed fixed line erosion and pricing and regulatory pressure, have been trading on consistently high free cash flow and dividend yields, as investors give little to no consideration to these companies’ sustained growth in emerging market mobile businesses and accelerating global broadband usage. We also remain constructive on information technology and industrial stocks as capital spending continues to recover. Global infrastructure needs broach both industries, and spending is being driven by both the private and public sectors.” 

About the Teams 

The international bond department, part of the Franklin Templeton Fixed Income Group®, takes a top-down approach, looking at foreign countries’ economies, geopolitical risks, interest rates and currencies.  The Franklin Templeton Fixed Income Group is currently composed of more than 130 investment professionals based in New York, San Mateo, London and Singapore combined with local asset management teams in China, Brazil, India, South Korea and the United Arab Emirates (U.A.E.).

The Templeton Global Equity Group uses a bottom-up investment approach, searching worldwide for undervalued companies. The Templeton Global Equity Group is currently composed of 36 portfolio managers and research analysts with an average of 17 years of industry experience and 11 years of tenure with the firm, located across seven global research offices.  

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. 

Franklin Templeton Distributors, Inc. is a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments.  Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams.  The San Mateo, CA-based company has more than 60 years of investment experience and over $735 billion in assets under management as of May 31, 2011.  For more information, please call 1-800/DIAL BEN® or visit franklintempleton.com.

 

1. The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, included responses from 1,049 U.S. adult participants surveyed between January 6 and 7, 2011. 

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. 

The risks of investing in foreign debt and equity securities include currency fluctuations and political and economic uncertainty. 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. The risks associated with higher-yielding, lower-rated securities include higher risk of default and loss of principal. Interest rate movements will affect the fund’s 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. While stocks have historically outperformed other asset classes over the long term, they tend to fluctuate more dramatically over the shorter term. The fund’s investment in derivative securities, such as financial futures and option contracts, and the fund’s use of foreign currency techniques involve special risks as such may not achieve the anticipated benefits and/or may result in losses to the fund. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results. These and other risks are described in the fund’s prospectus. 

The information provided is not a complete analysis of every material fact regarding any market, industry, security or fund. Holdings are subject to change. Opinions expressed are as of July 11, 2011, and can change without notice. A manager’s assessment of a particular security, investment or strategy is not intended as an investment recommendation; it is intended only to provide insight into the fund’s portfolio selection process.