Franklin Templeton has launched Emerging Markets Debt Opportunities hard currency fund, a sub-fund of the Luxembourg-registered Franklin Templeton Investment Funds (FTIF) range.
The new fund will primarily invest in fixed and floating rate debt securities and debt obligations as well as supranationals located in an emerging market country and denominated in G7 currencies. Luxembourg-based Investors can access this fund from 21 January 2019.
It will be managed by lead portfolio manager Nicholas Hardingham and portfolio managers, William Ledward and Stephanie Ouwendijk from Franklin Templeton Fixed Income Group's Emerging Markets Debt Opportunities team, who are all London-based.
"This new strategy will invest in debt that is denominated in hard currencies (i.e. currencies of developed economies but not limited to EUR, GBP, USD, JPY AND CHF). Additionally, exposure will be taken from quasi-sovereign and corporate issuers, resulting in a much larger investment universe, which gives us further opportunities to add alpha," said Hardingham.
The investment process consists of two integral steps: country allocation and issue selection. The team will seek to control risk by focusing on the possibility that an issuer might default on its debt that could negatively influence portfolio performance. To manage these risks, detailed country fundamental analysts is conducted and absolute limits for country exposures are established.