United States
Why Government Bonds?
Bonds issued and secured by the US government offer many potential benefits:
The Power of Active Management
Not all government bonds are created equal. For example, U.S. Treasuries may not have as much potential for yield as some mortgage-backed securities (MBS). And a typical passive (index-tracking) government bond fund can only take one approach – investing in securities found in its benchmark.
FTSD seeks the highest-yielding short-term U.S. government bond opportunities, such as MBS and Agencies.
A range of yields-to-maturity for various indexes in the government bond space
As of March 31, 2020
Index performance data represents past performance, which does not guarantee future results. One cannot invest directly in an index. Money Markets are represented by the U.S. Benchmark Bill—1 Month. Source: Bloomberg. U.S. Gov Bonds 1-3 Year Maturity are represented by Bloomberg Barclays U.S. Government 1- 3 Yr TR USD Index. US MBS represented by Bloomberg Barclays U.S. MBS Index. Agencies represented by Bloomberg Barclays U.S. Aggregate: Agencies Index.
At Franklin Templeton, our active managers target the best opportunities in the short-term government bond universe by applying active quant management, which combines fundamental research and a proprietary, machine learning-driven ranking system.
Active management in action1,2
Data as of March 31, 2020
Resources and Updates
Important Legal Information
Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. Investment return and principal value will fluctuate with market conditions, and you may have a gain or loss when you sell your shares.
All investments involve risks, including possible loss of principal. Interest rate movements, unscheduled mortgage prepayments and other risk factors will affect the fund’s share price and yield. Bond prices, and thus a fund’s share price, generally move in the opposite direction of interest rates. Therefore, as the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. These and other risks are discussed in the fund’s prospectus.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below their net asset value. Brokerage commissions and ETF expenses will reduce returns.
For more information on any of our funds, contact your financial advisor or download a free prospectus. Investors should carefully consider a fund's investment goals, risks, sales charges and expenses before investing. The prospectus contains this and other information. Please read the prospectus carefully before investing or sending money.
ETF shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.
The trading prices of the fund's shares in the secondary market generally differ from the fund's daily NAV and are affected by market forces such as supply and demand, economic conditions and other factors. Information regarding the intraday value of shares of the fund, also known as the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15 seconds throughout the trading day by the national securities exchange on which the fund's shares are listed or by market data vendors or other information providers. Therefore, the IOPV should not be viewed as a "real-time" update of the fund's NAV, which is computed only once a day.
Prior to trading in the secondary market, shares of the fund are "created" at NAV by market makers, large investors and institutions only in block-size Creation Units between 25,000 to 200,000 shares or multiples thereof. Each "creator" or "Authorized Participant" enters into an authorized participant agreement with Franklin Templeton Distributors, Inc, an affiliate of Franklin Advisory Services, LLC. Only an Authorized Participant may create or redeem Creation Units directly with the fund.
Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
The comments, opinions and analyses are the personal views expressed by the investment manager and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. The information provided in this material is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding any country, region, market or investment.
Footnotes
1Notional exposure figures are intended to estimate the portfolio's exposure, including any hedged or increased exposure through certain derivatives held in the portfolio (or their underlying reference assets). Portfolio breakdown percentages may not total 100% or may be negative due to rounding, use of any derivatives, unsettled trades or other factors.
2Source: Bloomberg. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
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