Franklin Templeton Investments has soft launched the FTIF Franklin K2 Global Macro Opportunities Fund, a sub-fund of the Luxembourg-registered Franklin Templeton Investment Funds (FTIF) SICAV range.
This is the second liquid alternatives fund to be launched in the FTIF range. Luxembourg-based investors will be able to access the new fund from 25 November 2016.
The multi-manager fund seeks total return over a full market cycle through capital appreciation and will aim to achieve this goal by allocating its net assets across global macro oriented ‘alternative’ strategies. These will be sub-advised by institutional-quality managers and selected by the investment management team, consisting of Brooks Ritchey and Rob Christian, both senior managing directors at K2 Advisors, as well as Anthony Zanolla, senior vice president of K2 Advisors.
Global macro hedge strategies generally have a highly flexible mandate and focus on capturing macro-economic opportunities through long and/or short positions across a wide range of asset classes globally, including equities, bonds, interest rates, currencies, and commodities indices.
Ritchey (pictured) says: “The Franklin K2 Global Macro Opportunities Fund is designed to help investors navigate their portfolios during periods of market volatility and investor uncertainty. Historically, global macro hedge strategies have shown diversification benefits in times of significant market stress.”
“Additionally, the multi-manager approach aims to provide an additional layer of diversification by offering exposure to different types of macro hedge strategies through a single portfolio, while offering daily liquidity and no performance fee,” adds Christian. “Further, we have chosen sub-advisors that cover systematic and discretionary strategies, which have historically behaved differently to one another over specific market periods.”
The fund’s allocations to the sub-advisers will reflect the top-down views of the management team, who will dynamically shift allocations based on where they believe opportunities and risks exist, while taking into account market conditions, risk factors, diversification, liquidity and transparency. K2 has been allocating to this strategy since 2006 and manages approximately USD1.6 billion in global macro-strategies.
Vivek Kudva, managing director, EMEA and India at Franklin Templeton Investments, says: “Following Franklin Templeton’s strategic acquisition of K2 advisors in 2012 and the success of the FTIF Franklin K2 Alternatives Strategies Fund2, we are excited to give European investors access to this new liquid alternatives strategy. K2 has a long history of world class risk management and expertise for seeking out hedge strategies that exhibit lower volatility and lower correlation to the broad capital markets. This, complemented by Franklin Templeton’s global resources in research, risk management and technology, makes for a compelling offering to investors looking to overcome the significant increase in volatility experienced across today’s global markets.”
The Franklin K2 Global Macro Opportunities Fund will allow the sub-advisers to invest in a wide range of global exchange traded and over the counter derivative instruments thus providing broad exposure – either long or short – to various asset classes, including equities, fixed income, interest rates and currencies. The fund may also hold a wide variety of securities, including equities and various credit instruments, such as sovereign, quasi-sovereign and corporate bonds in order to achieve its investment goal.