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Focus on Franklin Templeton fund flows: biggest inflows and outflows

Citywire examines the relationship between the performance of a fund and investor interest.

Flows vs. performance

Investors decide which funds to invest in based on a variety of reasons including asset class returns, recent performance and the track record of a manager. But does longer-term outperformance always lead to inflows in the shorter term?

In this series, our sister site Citywire Selector investigates the link between the three-year performance of a fund against its Citywire-assigned benchmark and the amount of money investors put into it over the first half of 2017.

Using Citywire data, this gallery reveals which funds at Franklin Templeton Investments were backing up strong returns with assets gathering and which were the facing up to tougher times. Read on to see whether popularity is based on performance.

Note: Flows figures based on Citywire data to the end of June 2017. Performance based on Lipper data compared to a Citywire-assigned benchmark over the three-year period covering August 2014-August 2017.

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Templeton Emerging Markets Bond

Net flows: $1.9 billion

The $6.85 billion Templeton Emerging Market Bond fund has seen the highest inflows out of all the cross-border funds at Franklin Templeton since the beginning of the year.

Fund performance seems to be one of the main drivers of inflows, as it has consistently beaten its benchmark since January 2015 and is ranked second out of 197 funds for its performance over a year to the end of July 2017.

Long term performance is also solidly above the average peer, who lost money during this timeframe. The fund is ranked fourth out of 39 funds and retuned 74.9% over the past 10 years.

Michael Hasenstab has managed the fund since June 2002 and Laura Burakreis joined him on the fund in January 2010. Brazil is the largest country allocation in the fund at 14.25% followed by India at 11.62%.

Estimated net flows derived from Lipper data using monthly data points. Assets across all a fund’s share classes are included with performance stripped out. The universe covers all active mutual fund assets Citywire has fund managers assigned to in the global ex US peer group. Time period: Three years to 31/08/2017.

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Franklin Floating Rate

Net flows: $437.5 million

The $2 billion Franklin Floating Rate fund has seen the second highest inflows out of all the funds at Franklin Templeton over the first half of the year.

Despite underperforming its benchmark on a three-year basis, the fund has the highest returns out of all the funds in this line up. Over the past year, the fund outperformed the sector average between August 2016 and May 2017.

The fund has been managed by Madeline Lam since July 2005, with Justin Ma joining as co-manager in June 2013. This is while Mark Boyadjian joined the team in September 2014.

The managers have 185 holdings in the fund, with the largest sector being retailers at 8.91%, which is followed by technology at 8.38%. The managers also have a 8.03% holding of cash.

Estimated net flows derived from Lipper data using monthly data points. Assets across all a fund’s share classes are included with performance stripped out. The universe covers all active mutual fund assets Citywire has fund managers assigned to in the global ex US peer group. Time period: Three years to 31/07/2017.

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Templeton Global Bond

Net flows: -$1 billion

The $18.2 billion Templeton Global Bond fund has seen the largest level of outflows over the first six months of 2017 at Franklin Templeton. The fund is the only one in this line-up which has lost money over three years.

The fund could have suffered from a reduced appetite for sovereign debt coupled with investors moving away from higher risk products. This fund operates with a lot of emerging market exposure and below investment grade government bonds, which means it has a different risk profile to many global bond funds.

Managed by Michael Hasenstab and Sonal Desai, the top 10 geographical allocations are entirely off benchmark. The largest country holding in the fund is Mexico at 22.92% followed by Brazil at 16.26%.

Estimated net flows derived from Lipper data using monthly data points. Assets across all a fund’s share classes are included with performance stripped out. The universe covers all active mutual fund assets Citywire has fund managers assigned to in the global ex US peer group. Time period: Three years to 31/08/2017.

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Templeton Asian Growth

Net flows: -$576.3 million

The $5 billion Templeton Asian Growth fund has seen the second highest amount of outflows and is the only equity fund in this line up.

Poor performance could be blamed for investors withdrawing their money from the fund, as it has consistently underperformed its benchmark and is ranked 348 out of 385 funds in the sector over three years.

In addition to performance, a manager change could partly explain recent outflows. In April 2017 Mark Mobius stepped down as lead manager from several funds including this one. Allan Lam, who had acted as co-manager since January 2016, was promoted to lead manager with Eric Mok joining him on the fund in April 2017.

The managers currently have 56 holdings in the fund, the largest of which is Chinese car manufacturer Brilliance Auto at 8.87% of the fund. In terms of sectors, energy is the largest allocation at 20.04% while the managers devote 19.47% to financials.

Estimated net flows derived from Lipper data using monthly data points. Assets across all a fund’s share classes are included with performance stripped out. The universe covers all active mutual fund assets Citywire has fund managers assigned to in the global ex US peer group. Time period: Three years to 31/07/2017.

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Related Fund Managers

Madeline Lam
Madeline Lam
18/23 in Bonds - Floating Rate Notes (Performance over 3 years) Average Total Return: 8.85%
Justin Ma
Justin Ma
19/23 in Bonds - Floating Rate Notes (Performance over 3 years) Average Total Return: 8.85%
Mark Boyadjian
Mark Boyadjian
16/23 in Bonds - Floating Rate Notes (Performance over 3 years) Average Total Return: 9.33%
Michael Hasenstab
Michael Hasenstab
9/112 in Bonds - Emerging Markets Global Local Currency (Performance over 3 years) Average Total Return: 6.20%
Laura Burakreis
Laura Burakreis
10/112 in Bonds - Emerging Markets Global Local Currency (Performance over 3 years) Average Total Return: 6.20%
Sonal Desai
Sonal Desai
115/351 in Bonds - Global (Performance over 3 years) Average Total Return: 2.30%
Mark Mobius
Mark Mobius
118/367 in Equity - Global Emerging Markets (Performance over 3 years) Average Total Return: 18.80%
Allan Lam
Allan Lam
199/276 in Equity - Asia Pacific Excluding Japan (Performance over 1 year) Average Total Return: 21.60%
Eric Mok
Eric Mok
245/294 in Equity - Asia Pacific Excluding Japan (Performance over 3 months) Average Total Return: 2.70%
Events
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