The Luxembourg-registered Franklin Templeton Investments, one of the world’s largest asset management groups, has launched a new global sub-fund appealing to investors seeking absolute return strategies under the name ‘Templeton Global Currency’.
Using a benchmark unconstrained approach, the new currency fund will aim to take advantage of the “inefficient” nature of global currency markets using instruments offering long/short exposure to currencies of any country, including developed and developing markets. The ongoing fee for the Luxembourg-domiciled fund is expected to be around 1.35 percent.
The fund’s portfolio managers include Michael Hasenstab, executive vice president and chief investment officer, as well as Sonal Desai, senior vice president and director of research from Templeton Global Macro, the firm’s flagship $130 billion global macro division.
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The new fund says the currencies’ historically low to moderate correlation to traditional asset classes make it increasingly viewed as a separate asset class. In addition, it provides compelling opportunities to generate excess returns relative to many other asset classes.
In the context of the overall portfolio, the fund offers the ability to pursue a multi-tiered approach, combining in-depth macroeconomic and country-specific research with fundamentals-based valuation analysis. This should enable the fund’s managers to capitalise on short-term market inefficiencies and capture positions that are believed to have the most potential to maximize returns.
Commenting on the launch, California-based Michael Hasenstab said: “By keeping a pulse on evolving economic and policy trends and employing our disciplined investment approach, we can uncover emerging opportunities to make compelling investments where the ability to go long or short allows us to best express our long-term views. “
“While our investment philosophy and approach to managing currencies has remained unchanged over nearly three decades, this new fund enables us to focus on our high-conviction currency views with access to an entire opportunity set of global currency investments in developed and developing markets,” he added.