Franklin Templeton launches hedged global bond fund

Franklin Templeton has announced the launch of a hedged global bond fund, which was designed for investors who want to mitigate the effects of currency fluctuations on their portfolios.

This new fund is a version of the Templeton Global Bond Fund, and the new offering is available as an alternative to the Templeton Global Bond Hedged Yield Class. Recently, the hedged class was closed to new investments due to the 2013 federal budget’s measures affecting character conversion transactions.

Read: Government extends transition time for character conversions

The portfolio management team of the new hedged bond fund aims to maximize investor returns in U.S. dollars. Its currency hedge was added via forward contracts that reduce the potential impact of exchange-rate fluctuations between Canadian and U.S. dollars.

The new fund invests in the original Templeton Global Bond Fund, which is managed by lead portfolio manager Dr. Michael Hasenstab and portfolio manager Dr. Sonal Desai.

“Our investment process seeks to take advantage of periods of elevated short-term volatility by identifying where markets have become disconnected from longer-term fundamentals,” says Hasenstab.

He adds, “Once volatility subsides and valuations begin to better reflect fundamentals, this can lead to potential subsequent gains.” The Templeton Global Bond Fund (Hedged) is available in Series A, F, I and O. These offerings are based in Canadian dollars.

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