September, 2023
The Fund invests in a diversified portfolio of Australian and global fixed income securities.
A professionally managed active portfolio seeking to deliver defensive and stable Australian dollar hedged returns.
A strong research driven investment process with a focus on market fundamentals to identify potential investment opportunities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Factsheet-FranklinAustralianAbsoluteReturnBondFund-WClass-19414-W-FF-AU-en-AU.pdfJune, 2023
The Fund invests in a diversified portfolio of Australian and global fixed income securities.
A professionally managed active portfolio seeking to deliver defensive and stable Australian dollar hedged returns.
A strong research driven investment process with a focus on market fundamentals to identify potential investment opportunities.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/FranklinAustralianAbsoluteReturnBondFund-WClass-19414-W-FF-AU-en-AU.pdfSeptember, 2022
Market Review:
• Despite a positive start in July, the September quarter of 2022 was challenging, with bonds falling in August and September to finish the threemonth period in the red.
• US inflation maintained its upward trend over the period. This caused the US Federal Reserve to raise its base rate by 75 basis points (bps) in both July and September.
• The Reserve Bank of Australia (RBA) raised its key interest rates three times over the period, then once more shortly after quarter-end, in a bid to rein in inflation before it reaches levels seen in other major economies.
• To ensure that inflation remains contained, central banks articulated the need for policy settings to remain at elevated levels for an extended period.
Performance Review:
• Over the third quarter, the fund returned -0.68%, underperforming its benchmark.
• Overweight duration positioning in Australia was the dominant detractor from relative performance.
• Positioning in New Zealand, Asia and US rates markets also hurt relative results.
• Conversely, spread-related portfolio positions contributed to relative returns, with outperformance in government-related sectors, as well as financials, industrials and utilities.
June, 2021
Over the second quarter, the fund returned 0.48%, outperforming its benchmark.
• Inflation positioning contributed over the quarter, notably a long position in US breakeven inflation.
• Positioning in corporate bonds and non-government sectors added relative value over the quarter, as spreads continued to grind tighter.
• Currency positioning was flat over the quarter.
• Regarding duration, we remain overweight in select parts of the Australian and New Zealand curves; these are focus positions as we move into the third quarter of 2021.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Franklin-Australian-Absolute-Return-Bond-Fund-Product-Profile-1.pdfDecember, 2020
Monetary and fiscal measures continued to be delivered in the December quarter. In early November, the Reserve Bank of Australia (RBA) cut interest rates to a new low of 0.10%. The US Federal Reserve maintained its accommodative policy stance over the period. In December, the European Central Bank announced an expanded asset purchase programme to help support the region’s ailing economies. Economic data supported the stances adopted by central banks and governments. Although data showed that Australia had emerged from its first recession in almost three decades, the RBA maintained its belief that a further economic recovery would be slow and reliant on continuing policy support. Australian government bond and US Treasury yields rose over the fourth quarter of 2020, although both fell over the year as a whole.
Over the fourth quarter, the fund returned 1.76% against the benchmark’s return of 0.02%. Within sector and security positioning, exposure to corporate industrial and financial bonds was the strongest source of relative returns. Macro positioning was also positive for relative performance over the quarter, notably long inflation positioning. Yield curve positioning further added to relative results, led by overweight duration positions in selected Asian markets. Currency positioning also added relative value over the quarter, particularly a short position in the US dollar and overweight allocations to higher quality Asian currencies.
File: https://commentary.quantreports.net/wp-content/uploads/2021/02/Franklin-Australian-Absolute-Return-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: FRT0027AU
release_schedule: Quarterly
commentary_block: Array
factsheet_url:
Documents
Factsheet
The factsheet is out every month, but only the month of March, June, September, and December has the commentary
fund_features:
Franklin Australian Absolute Return Bond Wholesale aims to provide investors with access to an actively managed portfolio of fixed income strategies with an aim to deliver returns in excess of the Bloomberg AusBond Bank Bill Index, after fees and expenses (but before taxes), over the short to medium term.
- The Fund seeks to achieve its investment objective by investing principally in fixed and floating-rate debt instruments issued by governments, government-related entities (including supranational organizations supported by several national governments) and corporations worldwide.
- The Fund’s investment universe consists of generally liquid fixed income instruments including high quality short-term call deposits and cash equivalent securities, government bonds, corporate and asset backed securities in Australia and overseas.
structure: Managed Fund