United States
Alternative Funds
WHAT IS AN ALTERNATIVE FUND?
Alternative funds typically invest in a variety of strategies and asset classes to provide risk and return profiles that have lower correlations to traditional asset classes, such as stocks and bonds. These funds may be attractive for investors seeking to reduce volatility and improve returns in their portfolios.
TYPES OF ALTERNATIVE FUNDS
There are a number of different types of alternative funds, each with their own characteristics and level of risk.
Real Assets
These funds typically invest in tangible assets that derive their value from their substance and physical properties. Real assets include real estate, public and private infrastructure, natural resources, precious metals, and commodities.
Real Estate
These funds typically invest in land plus anything permanently fixed to it, including buildings, through direct investment, partnerships, or real estate investment trusts (REITs). Property types include commercial and corporate facilities in addition to raw land, multifamily residential properties, and farm land.
Infrastructure
These funds typically invest in basic physical systems owned and operated by governmental entities and businesses. These projects can include transportation, communications, water and sewage, and electric systems that are vital to economic development and prosperity.
Hedge Strategies
Also referred to as alternative strategies, these investment strategies use both long and short positions in markets and securities as well as derivatives in an attempt to minimize market beta returns while seeking alpha and risk-adjusted returns. Some of the most common strategies are long and short equity, global macro, relative value, and credit.
Private Equity
Private equity funds typically invest in equity capital that is not quoted on a public exchange. Instead, the funds take direct ownership positions in private companies, which potentially may provide above-market returns and control of the investment, at the risk of reduced liquidity and diversification.
Private Debt
Private debt funds typically invest in non-listed debt issues, including bonds, notes, and loans issued by private companies. As with private equity, private debt positions may potentially provide greater returns and control than what is available in the public markets, but with reduced liquidity.
OUR APPROACH TO ALTERNATIVE FUNDS
We offer investors broad alternative investment capabilities spanning hedge strategies and real assets through a multi-boutique structure. We are focused on seeking new, uncorrelated active return sources by following disciplined, risk-controlled investment processes.
| Innovative Thinking from Specialized Expertise | A Rigorous Approach to Alternatives Investing | Sound Risk Management |
|---|---|---|
| Each portfolio team within our alternatives group is comprised of specialists who are leaders in their disciplines, backed by the strength of Franklin Templeton’s global operating platform. | We believe that our research-driven global perspective and a focus on active risk management can further enhance the potential portfolio benefits of alternative investments. | Our teams’ practices are complemented by the firm’s centralized risk management framework, providing improved risk transparency. This helps us pursue the desired return profiles in the most efficient manner. |
Featured Franklin Templeton Alternative Funds
FLGZX
(Advisor)The fund seeks total investment return consisting of income and capital appreciation. Under normal market conditions, the fund invests at least 80% of its net assets in securities of infrastructure-related companies located anywhere in the world.
FABZX
(Advisor)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.
FKMZX
(Advisor)The Fund’s principal investment goal is capital appreciation over a full market cycle. The Fund seeks to achieve its investment goal by allocating its assets across multiple global-macro focused, alternative strategies.
See all Franklin Templeton alternative funds.
HOW TO BUY FRANKLIN TEMPLETON ALTERNATIVE FUNDS
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Important Legal Information
- This website does not provide investment advice or investment recommendations. It is intended for educational and informational purposes only.
- All investments involve risks, including possible loss of principal. Generally, those offering potential for higher returns are accompanied by a higher degree of risk. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices are affected by interest rate changes. Bond prices, and thus a bond fund's share price, generally move in the opposite direction of interest rates. As the price of bonds in a fund adjusts to a rise in interest rates, the fund's share price may decline. High-yield, lower-rated ("junk") bonds generally have greater price swings and higher default risks. Foreign investing, especially in developing markets, has additional risks such as currency and market volatility and political or social instability. For tax-free income funds, the alternative minimum tax may apply. These and other risks pertaining to specific funds, such as those involving investments in specialized industry sectors or use of complex securities, are discussed in each fund's prospectus. By clicking on the fund name, you will be taken to a more detailed fund information page which includes main investments and risks.
- Your clients should carefully consider a fund’s investment goals, risks, charges and expenses before investing. Download a prospectus, which contains this and other information. Your clients should read the prospectus carefully before they invest or send money.
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