Franklin US Core Plus

Multisector fixed income strategy that invests in government, securitized and corporate sectors and may tactically invest up to 35% in plus sectors, including high yield, bank loans, emerging market debt and non-U.S. dollar securities.

OVERVIEW

STRATEGY SUMMARY

  • Focuses on investment-grade government, securitized and corporate debt sectors and may tactically invest in plus sectors, including high yield, bank loans, emerging market debt and non-U.S. dollar securities.
  • Constructs portfolios with a large number of small, low-correlated active positions, thus reducing the risk of poor performance from any single active position.
  • Our global aggregate framework, significant bottom-up resources, and integrated quantitative group allow us to identify market inefficiencies which we seek to exploit in a disciplined manner.

BENCHMARK

  • Bloomberg Barclays U.S. Aggregate Index

COMPOSITE PROFILE

A multi-page overview highlighting the composite performance, portfolio characteristics, investment process, management team and commentary.

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OUR APPROACH

Investment Philosophy

We believe that a portfolio built around a diversified set of active management positions has the potential to generate attractive information ratios over a full market cycle. We seek to accomplish this by implementing a large number of small, low-correlated active positions, with the goal of reducing the risk of poor performance from any single active position. Our global aggregate framework, significant bottom-up resources, and integrated quantitative group are designed to identify market inefficiencies which we seek to exploit within a disciplined, risk management process.

Investment Process Summary

Our investment process is structured to pursue diversified sources of potential alpha across securities, sectors and global markets. We aim to add value by exploiting market inefficiencies through both top-down allocation decisions and bottom-up security selection on a tactical and strategic basis.

Duration and Yield Curve Decision

  • Combine fundamental analysis and econometric models to help assess the optimal country, duration and yield curve strategy.
  • Analysis of fundamental factors includes: monetary and fiscal policy, the economic cycle, macroeconomic disequilibria, political influences, valuations, as well as technical factors.

Currency Decision

  • Currency managed as a separate asset class, although influenced by similar macroeconomic factors as duration positioning.
  • Currency views expressed tactically or on a longer-term strategic basis.

Sector Decision

  • Determine relative value of sovereign and non-sovereign debt around the globe.
  • Quantitative tools used to help determine return and volatility expectations across the term structure of credit spreads, designed to help us make relative value judgments between various sectors across the globe.

Security Selection

  • Dedicated sector specialists focus on five distinct segments of the market: credit, mortgages/Asset Backed Securities (ABS), municipals, emerging market debt and bank loans.
  • Sector specialist teams strive to identify specific undervalued issues for investment within each sector, setting price targets and investment time horizons.
  • Use bottom-up strategies involving the relative value analysis of comparable instruments and selection of specific securities that we consider to be undervalued with the aim to provide the best expected risk/return trade-off.

OUR TEAM

Sonal Desai

Sonal Desai, Ph.D
Executive Vice President,
Chief Investment Officer
Franklin Templeton Fixed Income Group
With firm since: 2009

David Yuen

David Yuen, CFA, FRM
Senior Vice President, Director of Quantitative Strategy and Risk, Portfolio Manager
Franklin Templeton Fixed Income Group
With firm since: 1988

Patrick Klein

Patrick Klein, Ph.D
Senior Vice President,
Portfolio Manager Multisector & Quant
Franklin Templeton Fixed Income Group
With firm since: 2005