September, 2023
The Fund invests in primarily global fixed income securities and debt obligations of government and government related and corporate issuers worldwide. The Fund can also invest in securities linked to assets and currencies of any nation, as well as derivatives.
A professionally managed active portfolio seeking to maximise total investment returns through an unconstrained approach to security selection, duration positioning and currency exposure.
A fundamental research-driven investment approach that integrates global macroeconomic analysis with in-depth country research to identify and exploit long-term economic imbalances.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Factsheet-FranklinTempletonMultisectorBondFund-WClass-13595-W-FF-AU-en-AU.pdfJune, 2023
The Fund invests in primarily global fixed income securities and debt obligations of government and government related and corporate issuers worldwide. The Fund can also invest in securities linked to assets and currencies of any nation, as well as derivatives.
A professionally managed active portfolio seeking to maximise total investment returns through an unconstrained approach to security selection, duration positioning and currency exposure.
A fundamental research-driven investment approach that integrates global macroeconomic analysis with in-depth country research to identify and exploit long-term economic imbalances.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/FranklinTempletonMultisectorBondFund-WClass-13595-W-FF-AU-en-AU.pdfSeptember, 2022
Market Review:
• Tightening monetary policy continued to be a dominant theme in the third quarter of 2022. Following a brief respite in July, sovereign bond yields continued their upward trend across much of the world as central banks embarked on or accelerated policy rate hikes to curb inflation.
• The US Federal Reserve continued the hiking cycle it had started in March, raising the fed funds target rate by 75 basis points (bps) at both of its July and September meetings, bringing the fed funds target rate to 3.00%–3.25%. US Treasury (UST) yields also surged to multi-year highs during the period. The 10-year UST yield rose 82 bps to 3.83% over the quarter. The shorter end of the curve bore the brunt of changed rate expectations and saw the two-year UST yield rise by 132 bps to 4.28%.
• A pause in the US dollar’s upward march in July proved short-lived, and it strengthened further against almost all developed and emerging market currencies during the third quarter.
Performance Review:
• In the third quarter of 2022, currency positions detracted from the portfolio’s absolute performance, as did overall credit exposures. Interest-rate strategies contributed to absolute results.
• Amongst currencies, positions in the South Korean won, Japanese yen, Chinese yuan, Thai baht, Indian rupee, Ghanaian cedi, Colombian peso, Argentine peso and Brazilian real detracted from the portfolio’s absolute performance.
• Amongst credit exposures, subinvestment-grade sovereign credits detracted from the portfolio’s absolute return.
• The portfolio maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Duration exposures in Argentina and Brazil contributed to absolute results.
June, 2022
• In the second quarter of 2022, currency positions detracted from the portfolio’s absolute performance, as did overall credit exposures and interest-rate strategies.
• Positions in the South Korean won, Chilean peso, Argentine peso, Brazilian real, Chinese yuan, Colombian peso, Indian rupee, Indonesian rupiah, New Zealand dollar and Ghanaian cedi against the USD detracted from the portfolio’s absolute results, as did positions in the Norwegian krone and Swedish krona against the euro. However, its position in the Canadian dollar against the euro contributed to absolute performance.
• The portfolio maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Duration exposures in Argentina and Ghana detracted from absolute results.
• Subinvestment-grade sovereign credits detracted from the portfolio’s absolute return.
March, 2022
• In the first quarter of 2022, currency positions detracted from the portfolio’s absolute performance. Interest-rate strategies contributed to absolute results, as did overall credit exposures.
• Positions in the Russian ruble, Ghanaian cedi, South Korean won and Japanese yen detracted from absolute performance. We closed our position in the Russian ruble in March. We also exited our position in the Japanese yen, primarily due to the expected depreciation pressures on the currency from widening rate differentials with the US. Positions in the Brazilian real, Chilean peso and Colombian peso against the USD contributed to absolute results, as did the portfolio’s positions in the Norwegian krone and Canadian dollar against the euro.
• The portfolio maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Duration exposures in Argentina and Ghana contributed to absolute performance.
• Subinvestment-grade sovereign credits contributed to the portfolio’s absolute return.
June, 2021
In the second quarter of 2021, interest-rate strategies contributed to the portfolio’s absolute performance, followed by overall credit exposures. Currency positions detracted from absolute results.
• The portfolio maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Select duration exposures in Latin America (Argentina), Africa (Ghana) and Asia ex Japan (Indonesia) contributed to absolute performance.
• Subinvestment-grade sovereign credits contributed to the portfolio’s absolute return.
• Currency positions in Latin America detracted from absolute results (the Argentine peso detracted, while the Brazilian real contributed. However, the portfolio’s positions in the Chinese yuan and the Russian ruble contributed to absolute performance.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Franklin-Templeton-Multisector-Bond-Fund-Product-Profile-1.pdfDecember, 2020
In the fourth quarter, currency positions contributed to the portfolio’s absolute performance, followed by interest-rate strategies. Overall credit exposures had a largely neutral effect on absolute results. In currency markets, the USD broadly weakened against major developed market and emerging market currencies alike during the quarter. Positions in northern European currencies (the Norwegian krone and Swedish krona) contributed to absolute performance, as did the portfolio’s net-positive positions in the Japanese yen and the Swiss franc.
We expect the Japanese yen to appreciate against the USD in upcoming months given Japan’s strong external balance. Currency positions in Asia ex Japan (the Indonesian rupiah) and Latin America (the Colombian peso) also contributed to absolute performance. However, the portfolio’s net-negative position in the euro detracted from absolute results, as did its tactical positioning (negative) in the Mexican peso. We continue to expect the euro to weaken against the USD given negative rates, as well as greater headwinds to growth and reflation efforts in Europe. Sovereign bond yields declined in much of core Europe, Latin America and Asia, notably Brazil, Mexico, Colombia, Indonesia and India. The portfolio maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Select duration exposures in Latin America (Argentina and Mexico) contributed to absolute performance.
On the duration front, we continue to see value in specific local-currency emerging markets, specifically in countries with domestically driven economies that are less vulnerable to external shocks. The portfolio’s Australian-dollar hedge functioned as designed during the quarter, providing Australian investors with a return in Australian dollars (AUD) that approximates the return a US investor would receive in US dollars. Since the AUD appreciated 7.68% against the US dollar during the quarter, the hedge into AUD had a positive effect for AUD-based investors. The AUD appreciated 9.88% against the US dollar for the one-year period ended 31 December 2020.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Franklin-Templeton-Multisector-Bond-Fund-Product-Profile.pdfasset_class: Fixed Income
asset_category: Multi-Strategy Income
peer_benchmark: Fixed Income - Multi-Strat Income Index
broad_market_index: Global Aggregate Hdg Index
manager_contact_details: Array
ticker: FRT0011AU
release_schedule: Quarterly
commentary_block: Array
factsheet_url:
DOCUMENTS
Quarterly Product Profile
fund_features:
structure: Managed Fund