Franklin Templeton has launched a five-year fixed maturity bond fund, and its initial public offering will run from March 27 to December 13, 2024.
A sub-fund of the Irish-domiciled Franklin Templeton Global Funds plc range, the Franklin Responsible Income 2029 Fund has been registered for sale in Austria, Germany, Greece, Italy, Ireland, Portugal and Spain.
Designed to be held until maturity in March 2029, this Article 8 fund under the SFDR seeks to generate income and reduce the risk of capital loss by investing primarily in sustainable, euro-denominated investment grade government and corporate bonds issued from developed and emerging markets.
The fund will hold a minimum of 60% invested in investment grade bonds, ensuring an average credit rating of investment grade.
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The portfolio management team includes David Zahn, head of European fixed income and Rod MacPhee from Franklin Templeton Fixed Income. Zahn commented: “Interest rates will likely fall at some point this year, and this launch is an opportunity for investors who wish to get ahead of expected rate cuts by locking in higher yields now.”
“We engage directly with issuers to improve their transition towards supporting a low-carbon economy while avoiding those involved in harmful or controversial activities,” added Zahn.
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The asset manager shared that security selection will prioritise minimising default risk, aiming for a steady income and minimising capital loss, and monitoring will ensure adjustments are made in response to an increase in default risk.
The fund is an offering of the Franklin Templeton Fixed Income group which manages fixed income strategies actively by integrating “top-down macroeconomic views, bottom-up fundamental research and quantitative science”.
