Franklin Global Absolute Return

This global multi-sector strategy seeks to provide total return over a full market cycle through a combination of current income and capital appreciation by investing in a wide range of global debt securities in terms of country, sector, quality, maturity or duration without reference to a benchmark index.

OVERVIEW

STRATEGY SUMMARY

  • A global multi-sector fixed income strategy seeking to generate consistent absolute returns through reducing undesired market risk (beta) while uncovering opportunities that our analysts believe have the potential to provide positive excess return from active management (alpha).
  • The strategy targets a return of LIBOR plus 1-3%, a volatility profile in the 1-3% range and a Sharpe ratio of 1 or greater. Target return and volatility are customizable. The typical mandate is 2-3% return with a 2% level of risk.

Key Advantages

  • For investors seeking an alternative to traditional fixed income investments, the strategy is designed to actively seek attractive return opportunities across a broad investment universe.
  • The strategy aims to provide a stable return profile by focusing on reducing interest rate risk (beta) and seeking to minimize drawdowns.
  • The strategy is not bound by a benchmark and has the ability to go both long and short, which may offer diversification to traditional fixed income allocations where duration typically drives risk and return.

BENCHMARK

  • LIBOR 90 Day (USD) Index

COMPOSITE PROFILE

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

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"We take an unconstrained investment approach with dynamic sector rotation, active currency management, security selection and relative value positioning, while aiming to manage risks such as duration.”

OUR APPROACH

Investment Philosophy

We believe that applying a tactical, risk-focused approach to a diversified set of holdings across global fixed income sectors can create a more attractive risk/return profile that can help to neutralize the impact of interest rate risk.

Investment Process Summary

Key elements of our investment process include:

  • Broad investment universe: The strategy invests in a wide range of global debt securities, with a focus on non-traditional global fixed income asset classes with the aim of diversifying sources of return.
  • Alpha strategies: Multiple independent sources of alpha potential include dynamic sector rotation, active currency management, bottom-up security selection, global interest rates and relative value positioning.
  • Beta management: Aims to hedge and manage market risks from currency, country, interest rate and credit in an effort to deliver consistent returns, regardless of market environment.

OUR TEAM

David Yuen

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