A unique combination of daring and caution

Templeton Global Bond can play a valuable role as a portfolio diversifier, but risk-averse investors should look elsewhere.

Jeffrey Bunce, CFA 31 January, 2018 | 6:00PM
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Templeton Global Bond is among the boldest entrants in the Global Fixed Income category. Most notably, its emerging-markets-heavy profile has caused it to move in sync with riskier assets and sport one of the highest correlations to equities in the group over the longer term.

The fund's lack of exposure to safe-haven currencies like the yen and euro has hurt relative returns when those currencies strengthen against the Canadian dollar. However, lead manager Michael Hasenstab's investment themes and shrewd bond and currency selection have led to topnotch long-term performance. His experience, a skilled and generally stable analyst bench and the fund's consistent approach make it a compelling long-term investment for those looking to diversify their domestic bond portfolio and for those more concerned with absolute returns over benchmark-relative returns. As a diversifier, the fund can also play a valuable role in more conservative target-risk portfolios but on a stand-alone basis, risk-averse investors or those with shorter time horizons may be better served elsewhere.

Hasenstab began his career at the firm in 1995 as an emerging-markets sovereign credit analyst, then left to get a doctorate in economics from the Australian National University, before rejoining the firm in 2001 and becoming a co-manager on the version of this fund sold in the United States. He became the fund's sole manager in 2006. Sonal Desai joined Hasenstab as co-manager in 2011, though Hasenstab makes all final portfolio decisions.

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About Author

Jeffrey Bunce, CFA

Jeffrey Bunce, CFA  Jeffrey Bunce, CFA, is a senior investment analyst for Morningstar’s Investment Management group.

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