Franklin Templeton Investments Introduces Templeton Emerging Markets Bond Fund for U.S. Investors
San Mateo, CA, April 3, 2013 -- Franklin Templeton Investments today announced the introduction of Templeton Emerging Markets Bond Fund, an actively managed, U.S.-registered mutual fund that seeks current income with capital appreciation as a secondary goal. The Fund invests in 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 (as defined in the prospectus).
“Emerging markets have seen tremendous interest recently from investors world-wide because of their increased share of the global economy and capital markets, along with their growth potential,” said Dr. Michael Hasenstab, the Fund’s lead portfolio manager and co-director of Franklin Templeton Fixed Income Group’s® international bond department. “Economic fundamentals in many emerging markets appear to be healthier than in many developed countries, even though yields on many emerging market debt issues have recently been higher. Additionally, credit quality and liquidity in emerging market debt have generally improved over the past decade. With Templeton Emerging Markets Bond Fund, we can take advantage of opportunities in currencies, local interest rates, sovereign credits and corporate credits to gain a broad exposure to emerging markets fixed income.”
The Fund’s portfolio managers, Michael Hasenstab and Laura Burakreis, are supported by the analysis and insight of the Franklin Templeton Fixed Income Group which consists of over 140 investment professionals with an average of more than 14 years of industry experience. The Fund’s managers employ an active, benchmark-agnostic investment style, based on fundamental, country-by-country macroeconomic research that incorporates quantitative analysis, macro-analytic models, local market insight and rigorous risk management.
“We expect many emerging markets to benefit from solid fundamentals, as well as ongoing capital inflows from worldwide quantitative easing,” Hasenstab added. “We remain encouraged about the growth prospects and low indebtedness of many emerging markets. Asia ex-Japan looks reasonably strong to us, as do select economies in Latin America and Europe. We believe credit conditions have remained favorable in these regions given their low levels of debt and relatively stronger growth rates. Many countries in these regions also have offered higher short-term interest rates and had undervalued currencies, in our opinion. We favor those countries with policymakers who have stayed ahead of the curve regarding fiscal, monetary and financial policy.” For more global market viewpoints from Dr. Hasenstab and other Franklin Templeton portfolio managers, visit Franklin Templeton’s investment commentary page and Beyond Bulls & Bears blog.
All investments involve risks, including possible loss of principal. Changes in interest rates will affect the value of the fund’s portfolio and its share price and yield. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the Fund’s share price may decline. The Fund’s use of foreign currency techniques involve special risks, as such techniques may not achieve the anticipated benefits and/or may result in losses to the Fund. Currency rates may fluctuate significantly over short periods of time, and can reduce returns. 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 (as well as enable gains) 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. Special risks are associated with foreign investing, including currency rate fluctuations, economic instability and political developments. Investments in developing markets involve heightened risks related to the same factors, in addition to those associated with their relatively small size and lesser liquidity. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. The risks associated with higher-yielding, lower rated securities include higher risks of default and loss of principal. The Fund is also non-diversified, which involves the risk of greater price fluctuation than a more diversified portfolio. These and other risk considerations are discussed in the Fund’s prospectus.
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN /(800)342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.
The Fund’s principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 investment teams. The San Mateo, CA-based company has more than 65 years of investment experience and over $813 billion in assets under management as of February 28, 2013. For more information, please call 1-800/DIAL BEN® or visit franklintempleton.com.
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