Fund Description

The fund seeks a high level of current income, with a secondary focus on capital appreciation, by investing predominantly in higher-yielding, lower-rated corporate bonds.

Strategy Statement

"The fund focuses on higher-yielding, lower-rated corporate bonds. We examine financial structure, cash flow, earnings prospects, market share and strategic positioning."


Glenn Voyles, CFA

Glenn Voyles, CFA®

  • Joined Franklin Templeton in 1993
  • Managed Fund Since 2015
Bryant Dieffenbacher, CFA

Bryant Dieffenbacher, CFA®

  • Joined Franklin Templeton in 2009
  • Managed Fund Since 2020
S. James McGiveran III, CFA

S. James McGiveran III, CFA®

  • Joined Franklin Templeton in 2006
  • Managed Fund Since 2020
Patricia O'Connor, CFA

Patricia O'Connor, CFA®

  • Joined Franklin Templeton in 1997
  • Managed Fund Since 2020


Investment Philosophy

Franklin Templeton Fixed Income believes that integrating top-down macroeconomic views, bottom up fundamental research, and quantitative science provides us with a competitive edge to navigate challenging investment environments, pursue consistent alpha, and better serve our clients.

Fundamental Credit Research Process

Our corporate credit strategies apply a research-driven approach to investing, relying primarily on bottom-up, fundamental analysis to identify corporate fixed income securities with the potential to offer high yield without excessive risk.

Credit research is conducted by a team of global corporate credit analysts who conduct in-depth fundamental and technical research on individual corporate issuers, as well as make macro-based industry evaluations. Organized regionally, analysts specialize by industry sector, covering investment grade and high yield issuers. This joint credit quality structure affords a more comprehensive industry view that facilitates a deeper understanding of the relevant risk factors in each broad sector and permits analysts to conduct more accurate relative value analysis when comparing credit spreads.

The team may also leverage macroeconomic views from the Fixed Income Research and Strategy Team (FIRST). FIRST includes all Franklin Templeton Fixed Income investment professionals and representatives from other Franklin Templeton investment teams. The Quarterly Research and Strategy Forum allows FIRST to present and debate independently derived macro, fundamental, and quantitative research.

Screening Process

The research process begins with an investment universe of approximately 1,000 issuers that analysts screen to remove smaller, less liquid issuers, resulting in a focus group of 50-75 companies per industry. These companies are further screened with a fundamental focus on financial strength to compile a select list of companies within each industry. Analysts perform rigorous company and industry research on this focus list, producing and maintaining detailed financial models and analysis of each company’s financial structure, earnings and cash flow projections, business and financial risk factors, and any other pertinent company information. This research relies on a combination of financial statement analysis and direct contact with company management. Analysts develop industry-specific buy/hold/sell ratings for the companies on the focus list, which is updated regularly.

Buy List

Issuers with favorable fundamental characteristics are compiled into an industry-specific Buy List based on a number of factors, including, but not limited to:

  • Total return potential
  • Measured risk
  • Attractive valuation
  • Sound structure

Buy List recommendations reflect our analysts’ views of fundamental trends and relative valuations versus the broad high yield market, as well as industry recommendations, and are updated on an ongoing basis. Analysts discuss their recommendations and the underlying rationale with portfolio managers who make the security selection and positioning decisions for the portfolio. Corporate credit portfolios are well-diversified, typically with exposure to issuers across all major industries; industry, issuer and issue level diversification naturally reduces the potential negative impact that any one company or industry may have on the portfolio’s overall performance. The fundamental research process that results in our Buy List is illustrated in the below charts. Given their understanding of the fundamental drivers for assigned industries, analysts also make recommendations on the expected performance of an industry versus the broad credit market (over-, under-, or market-weight).

Footnote: Diversification does not assure a profit or protect against loss.


Overall Morningstar Rating [further-information] As of 08/31/2021

Rating Category: High Yield Bond

The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Historical Morningstar Rating [further-information] As of 08/31/2021

Years Ratings Funds
in category
4 Stars
4 Stars
3 Stars

Morningstar Style Box As of07/31/2021

Strategy, Benefits, Results


  • We conduct independent, bottom-up analysis focusing on critical factors that affect a company's long-term performance.
  • We seek to opportunistically invest in companies and sectors that are infrequently followed or are out of favor with the marketplace.
  • We adhere to a long-term disciplined approach through changing market environments, supported by separate risk management and quantitative research groups.


  • Diversified Portfolio. We invest in hundreds of securities representing various industries, thereby helping to reduce the potential negative impact any one security or sector may have on the fund's overall performance.
  • Proven Track Record. With performance dating back to 1969, our fund has successfully navigated a variety of economic environments.
  • Global Fixed Income Expertise. Investors have full access to the research resources of the Franklin Templeton Fixed Income Group®.