Portfolio Manager Perspectives

Jeff Benjamin

New Franklin fund does global locally

Taps firm's asset management operations around the world

Jan 20, 2011 @ 11:05 am

By Jeff Benjamin

Franklin Templeton Investments has expanded the adage “all politics are local” to international investing.

The Franklin World Perspectives Fund, launched Dec. 16, has raised the stakes on the idea of a globally managed mutual fund for U.S. investors. Following in the footsteps of an offshore version launched in October 2008, it taps local asset management operations in offices around the globe.

That is no small distinction, according to Stephen Dover, international chief investment officer for Franklin Templeton's local asset management group.

“The history of investing globally has normally involved an Anglo person getting on a plane” and traveling to a foreign country to do research, said Mr. Dover, who is portfolio manager of the new fund. “But as [the global markets] have developed, the quality of the local money managers have improved as well.”

The fund, which is about two weeks away from having a ticker symbol, allocates slices of the portfolio to autonomous Franklin Templeton asset management offices in India, Vietnam, China, Japan, Korea, Canada, Brazil, Dubai and the United Kingdom.

Franklin Templeton started opening local offices, run by local asset managers, 15 years ago. In total, the local asset management operations now manage $20 billion.

Combing the local expertise into a single fund creates a globally diversified and dynamic portfolio of more than 250 securities, with an annual turnover rate of around 80%.

“This is a fund that is managed 24-7,” Mr. Dover said. “That's a lot different from just having a fund managed whenever the portfolio manager is in the office.”

Mr. Dover is responsible for allocating slices of the portfolio to the local asset managers.

A neutral allocation, he explained, would track the MSCI All Country Index, which Franklin Templeton has tweaked to add a minor weighting in frontier markets such as Vietnam.

The portfolio's largest weighting is the United States, at 40%, compared with a 42% benchmark weight.

The fund is tracking the benchmark with a 25% allocation to Europe.

The next-largest weighting is the Asia-Pacific region at 18%, compared with a 15% benchmark weight.

Other examples of where the portfolio is out of sync with the MSCI index are the 5.5% allocation to Japan, versus 9% for the benchmark; a 3% allocation to Brazil, compared with a 2%; and 1.5% to frontier markets, which make up just 0.5%.

Mr. Dover said that in terms of performance, the impact of the local asset management presence is more important than any benchmark overweighting or underweighting.

“Most of the value will be created by the local managers,” he said. “Instead of just using the research from the local managers, we are empowering the local managers.”

The offshore version of the fund gained 14.8% last year, compared with a 13.3% benchmark return.

For an example of the unique perspective added by the local asset managers, consider the $5.8 billion Templeton World Fund Ticker:(TEMWX), which has 94 positions, only 10 of which are also in the World Perspectives Fund.

“Our local asset management teams provide a bottom-up perspective on market conditions and valuations,” Mr. Dover said. “This insight means that our investments are not limited to the largest and most visible companies in each market but often include less recognizable names.”

Portfolio Manager Perspectives are regular interviews with some of the most respected and influential fund managers in the investment industry. For more information, please visit InvestmentNews.com/pmperspectives.


What do you think?

View comments

Upcoming event

Jul 09


Boston Women Adviser Summit

The InvestmentNews Women Adviser Summit, a one-day workshop now held in six cities due to popular demand, is uniquely designed for the sophisticated female adviser who wants to take her personal and professional self to the next level.... Learn more

Most watched


Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.


Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Latest news & opinion

The growth of factor-based investing

Advisers are making decisions about clients' portfolios by using the same characteristics that govern factor-based ETFs.

Finra makes its list to target hundreds of rogue individuals

The regulator sees patterns in the behavior and disclosures of high-risk brokers.

LTC insurer offering co-pays to blunt soaring premium increases

John Hancock policyholders would get a discount on their premium in return for agreeing to pay a bigger portion of their claims in the future.

Goldman Sachs acquires United Capital

After a payday of $75 million or more, CEO Joe Duran plans to join Goldman in a senior position.

Private equity loves IBDs, but will that last?

Three big acquisitions in less than a year signals renewed life in the formerly beleaguered industry.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print