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."

Management

Glenn Voyles, CFA

Glenn Voyles, CFA®

  • Joined Franklin Templeton in 1993
  • Managed Fund Since 2015

INVESTMENT PHILOSOPHY, STRATEGY AND APPROACH

Investment Philosophy

We believe that strong high-yield returns can be best sought through the disciplined application of a research-based approach that seeks to capitalize on inefficiencies across the high-yield market. Through rigorous bottom-up research, we seek to identify attractive income and total return opportunities with the potential to add value over a three- to five-year horizon.

Investment Process

Fundamental Analysis

  • Conduct independent, bottom-up analysis focusing on critical factors that affect a company's long-term performance, such as financial structure, cash flow and earnings prospects, products, market share and strategic positioning

Long-Term Outlook

  • Analyze securities whose projected return potential over three to five years surpasses the potential risk of adverse price movements or default

Seek Valuation Inefficiencies

  • Invest opportunistically in companies and sectors that are infrequently followed or are out of favor with the marketplace

Disciplined Approach

  • Seeks to adhere to a long-term strategy through changing market environments, supported by separate in-house risk management and quantitative research groups

Rating

Overall Morningstar Rating As of 10/31/2019

Rating Category: High Yield Bond

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 10/31/2019

Years Ratings Funds
in category
3
4 Stars
610
5
2 Stars
536
10
3 Stars
340

Morningstar Style Box As of09/30/2019

Strategy, Benefits, Results

Strategy

  • 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.

Benefits

  • 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®.

Selling The Fund

  1. Mention how the research-driven, bottom-up investment approach independently evaluates each issuer.
  2. Discuss how our flexible strategy allows the investment team to implement "best of best" ideas from various fixed-income sectors.
  3. Highlight our ongoing adherence to stringent risk-management disciplines.