Fund Description

The fund’s principal investment goal is capital appreciation with lower volatility relative to the broad equity markets. The fund seeks to achieve its investment goal by allocating its assets across multiple alternative strategies.

Strategy Statement

"By dynamically allocating among strategies and institutional alternative managers, we aim to maximize participation in up markets while seeking to reduce risks in down markets."

Brooks Ritchey

Management

Brooks Ritchey

Brooks Ritchey

  • Joined Franklin Templeton in 2005
  • Managed Fund Since 2014
Robert Christian

Robert Christian

  • Joined Franklin Templeton in 2010
  • Managed Fund Since 2014
Anthony M Zanolla, CFA

Anthony M Zanolla, CFA®

  • Joined Franklin Templeton in 2014
  • Managed Fund Since 2018

INVESTMENT PHILOSOPHY, STRATEGY AND APPROACH

Investment Philosophy
Our investment philosophy is to work to grow capital by seeking to produce attractive risk-adjusted returns with lower correlation to traditional asset classes and reduced volatility. We believe that comprehensive risk management, rigorous manager research and active strategy allocation are key to a successful multi-strategy, multi-manager alternatives fund.

Investment Process
K2 Advisors (K2) combines manager research with strategy allocation analysis to contruct a dynamic multi-manager, multi-strategy fund that seeks to reduce downside risk while providing capital appreciation potential from a complementary alternative source of returns.

  • Dynamic and diversified alternative strategy allocation analysis is performed from a top-down perspective. Through this analysis, K2 seeks to identify factors influencing returns and risks across market cycles.
  • Utilizing holdings-based transparency, K2 seeks to identify alpha-generating managers through manager research and monitoring. On an ongoing basis, K2 then monitors each manager’s market exposures as well as operational and headline risks.
  • K2’s portfolio construction process aims to manage overall portfolio exposures and risks through extensive modeling and scenario analysis.

An Integrated Solution to Access Multiple Alternative Strategies

Rating

Overall Morningstar Rating As of 11/30/2019

Rating Category: Multialternative

Morningstar
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 As of 11/30/2019

Years Ratings Funds
in category
3
3 Stars
237
5
4 Stars
181
10
Stars

Morningstar Style Box

We do not publish a style box for this fund.

Strategy, Benefits, Results

Strategy

  • The fund seeks to add value through active portfolio management, tactical allocation and diversification across four main alternative strategies in a multi-manager fund structure.
  • The hedge strategies include long short equity, relative value, global macro and event driven.

Benefits

  • Portfolio Complement. An allocation to hedge strategies provides an alternative source of returns while seeking to reduce risk.
  • Diversified Alternative Solution. The fund provides one-stop access to a diversified selection of institutional hedge fund managers and strategies.
  • A Combination of Disciplined Capabilities. The investment process combines manager research with asset allocation analysis to construct a multi-manager, multi-strategy fund seeking to participate on the upside and reduce the downside.
  • Risk Management. The investment team applies extensive risk processes, systems and data to help ensure risks can be continually measured, monitored and managed.
  • Alternatives Expertise. K2 Advisors has 20 years of hedge fund experience and a deep understanding of the hedge strategies they cover.

Selling The Fund

  1. Highlight how an alternative fund can provide diversification to traditional investments while seeking to reduce overall portfolio volatility.
  2. Explain how this diversified, multi-strategy fund provides a one-stop core alternatives solution.
  3. Emphasize K2 Advisors’ extensive manager selection process which seeks to identify high-caliber institutional managers.