Fund Description

The fund's investment goal is to seek current income with capital appreciation as a secondary goal. Under normal market conditions, the fund invests at least 80% of its net assets in a non-diversified portfolio of bonds issued by governments or government related entities that are located in emerging market countries, as well as bonds issued by emerging market corporate entities.

Strategy Statement

"Emerging market bonds provide exposure to different interest rate and currency dynamics, as well as attractive yields offered by developing countries around the world."

Michael Hasenstab, Ph.D

Management

Michael Hasenstab, Ph.D

Michael Hasenstab, Ph.D

  • Joined Franklin Templeton in 1995
  • Managed Fund Since 2013
Laura Burakreis

Laura Burakreis

  • Joined Franklin Templeton in 2006
  • Managed Fund Since 2013
Sonal Desai, Ph.D

Sonal Desai, Ph.D

  • Joined Franklin Templeton in 2009
  • Managed Fund Since 2018

Strategy, Benefits, Results

Strategy

  • Quantitative and qualitative analysis is supplemented with on-the-ground research, leveraging the resources of local analysts around the world to identify investment opportunities and risks that a solely U.S.-based manager might miss.
  • Research efforts focus on rigorous country analysis to identify economic imbalances leading to value opportunities in currencies, interest rates (duration) and sovereign and corporate credit.
  • We continually evaluate risk, shifting the risk budget based on relative attractiveness over the course of global economic and credit cycles.

Benefits

  • Income potential. By investing in emerging market bonds, the fund can potentially offer an attractive level of income.
  • Economic Growth. Emerging markets have increased their share of the global economy and capital markets, a trend which we believe is likely to continue.
  • Diversification. Adding emerging markets fixed income securities to an overall investment portfolio including other major asset classes offers investors the potential for greater diversification.

Investing In The Fund

What Are the Risks?

  • All investments involve risks, including possible loss of principal.
  • Foreign securities involve special risks, including currency rate fluctuations (which may be significant over the short-term) and economic and political uncertainties; investments in emerging markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity
  • Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a government entity may be unwilling or unable to pay interest and repay principal on its sovereign debt, or otherwise meet its obligations when due.
  • Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio that may result in significant volatility and cause the fund to participate in losses on an amount that exceeds the fund's initial investment.
  • The fund may not achieve the anticipated benefits and may realize losses when a counterparty fails to perform as promised.
  • Bonds are subject to liquidity risk, which may have an adverse impact on the security's value or a fund's ability to sell such securities.
  • Changes in interest rates will affect the value of the fund's portfolio, share price and yield.
  • Bond prices generally move in the opposite direction of interest rates. As 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
  • Investments in lower rated securities include higher risks of default and loss of principal.
  • These and other risks are discussed in the fund's prospectus.

Minimum Investment

See Prospectus

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