Franklin Templeton Investments Corp. has introduced a new fund for Canadian investors looking to minimize the effects of changing currency valuations on their global equity holdings. It’s called the Templeton Growth Fund, Ltd. Series A (Hedged).
“Global equities have provided Canadians with diversification in their portfolios, but the strength of the Canadian dollar has been eroding positive total returns in global investments,” says Ronice Barlow, head of strategic planning and business development, Canada, with Franklin Templeton Investments Corp. “Templeton Growth Fund’s new currency-hedged series will employ Templeton’s global expertise to provide investors with value opportunities and also reduce the impact of currency fluctuations.”
Templeton Growth Fund, Ltd. Series A (Hedged) is a hedged series of Templeton Growth Fund, Ltd., which Sir John Templeton first introduced to Canadians in 1954.
This new hedged series seeks to provide long-term capital appreciation, while reducing the potential effects of exchange rate fluctuations between the Canadian dollar and global currencies by investing in forward contracts. A mechanical hedge will be applied on currencies that represent a material exposure in the portfolio. It is expected that the independent hedging will help the investment returns be more reflective of the portfolio manager’s investment process, philosophy and security selection.
“Value stocks have outperformed and equity correlations have declined during the first quarter of 2013, which suggests that investors are beginning to refocus on fundamentals after a period of macro-driven trading. Media, technology and healthcare holdings have all contributed to Templeton Growth Fund’s positive performance over the past quarter,” says Lisa Myers, lead manager of Templeton Growth Fund, Ltd. since 2006. “The macro concerns in Europe have been challenging, but we expect our select financial holdings in that region to eventually have more normalized levels of profitability. While macroeconomic noise will persist and volatility may return, we believe compelling buying opportunities will be present for value-oriented investors.”