Fund Description

The fund seeks current income with capital appreciation and growth of income. It invests predominantly in bonds issued by governments, government related entities and government agencies located outside of the U.S. Although the fund may buy bonds rated in any category, it focuses on investment grade bonds. The fund regularly enters into various currency-related and other transactions involving derivative instruments.

Strategy Statement

"The fund invests predominantly in foreign (non-U.S.) bonds. We invest in countries we believe bonds are underpriced and where we think country fundamentals offer potential for price appreciation."

Michael Hasenstab, Ph.D

Management

Michael Hasenstab, Ph.D

Michael Hasenstab, Ph.D

  • Joined Franklin Templeton in 1995
  • Managed Fund Since 2007
Sonal Desai, Ph.D

Sonal Desai, Ph.D

  • Joined Franklin Templeton in 2009
  • Managed Fund Since 2011

Rating

Overall Morningstar Rating As of 12/31/2017

Rating Category: World 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 12/31/2017

Years Ratings Funds
in category
3
2 Stars
271
5
2 Stars
243
10
Stars

Morningstar Style Box As of09/30/2017

Strategy, Benefits, Results

Strategy

  • We seek current income with capital appreciation and growth of income, as well as to capitalize on fixed income opportunities outside of the United States.
  • We invest in countries that we believe have underpriced bonds and fundamentals with the potential for price appreciation.
  • Our assets are allocated based on the manager's assessment of changing market, political and economic conditions, and an in-depth evaluation of interest rates, exchange rates and credit risks.

Benefits

  • Portfolio Diversification. Adding foreign fixed income securities to a portfolio of domestic securities offers U.S. investors greater diversification and the potential for reduced volatility.
  • International Expertise. Our experienced and diverse team of investment professionals operate in strategic locations around the world.
  • Local Resources. We access the research resources and expertise of local managers and analysts in China, Korea, India, Brazil and the United Arab Emirates.

Investing In The Fund

What Are the Risks?

  • All investments involve risks, including possible loss of principal.
  • Derivatives, including currency management strategies, involve costs and can create economic leverage in the portfolio which 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.
  • The markets for particular securities or types of securities are or may become relatively illiquid. Reduced liquidity will have an adverse impact on the security’s value and on the fund’s ability to sell such securities when necessary to meet the fund’s liquidity needs or in response to a specific market event.
  • Foreign securities involve special risks, including currency 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.
  • 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.
  • Investments in lower-rated bonds include higher risk of default and loss of principal.
  • Bond prices generally move in the opposite direction of interest rates. 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.

Minimum Investment

See Prospectus

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