Footnotes:
1. A composite is an aggregation of one or more portfolios into a single group that represents a particular investment objective or strategy. The composite return is the asset-weighted average of the performance results of all the fully discretionary portfolios in the composite. The composite return information provided herein includes the returns of Franklin Separately Managed Accounts, high-net- worth individual and institutional client portfolios and with respect to any periods prior to the inception of Franklin Separately Managed Accounts, reflects the performance of any such other portfolios.
2. Blended 50% MSCI USA High Dividend Yield Index + 25% Bloomberg High Yield Very Liquid Index +25% Bloomberg US Aggregate Index is equivalent to Custom Franklin Income Strategy Benchmark.
3. Source for Index: FactSet. Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
Important Information
The information contained in this piece is not a complete analysis of every material fact regarding the market and any industry, sector, security or portfolio. Statements of fact cited by the manager have been obtained from sources considered reliable but no representation is made as to their completeness or accuracy. Because market and economic conditions are subject to rapid change, opinions provided are valid only as of the date of the material, and are subject to change without notice. The manager’s opinions are intended solely to provide insight into how the manager analyzes securities, may differ from that of other affiliated managers, and are not a recommendation or individual investment advice for any particular security, strategy or investment product. Any securities discussed may not represent an account’s entire portfolio and in the aggregate may represent a small percentage of an account’s portfolio holdings. There is no assurance that any such securities will remain in an account’s portfolio, or that securities sold have not been repurchased. It should not be assumed that any securities transactions discussed were or will prove to be profitable. The information provided should not be considered a recommendation to purchase, sell or hold any particular security. All indexes are unmanaged and cannot accommodate direct investment. Investors should review their investment objectives, risk tolerance and liquidity needs before choosing a manager.
There is no guarantee that investment strategies will work under all market conditions, and investors should evaluate their ability to invest for the long term, especially during periods of market downturns. Past performance is not an indicator or guarantee of future performance.
Franklin Separately Managed Accounts claims compliance with the Global Investment Performance Standards (GIPS®). GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organisation, nor does it warrant the accuracy or quality of the content contained herein.
Franklin (the “Firm”) is a global investment management group that manages equity, fixed income, balanced accounts, REIT funds, private funds, multi- asset strategies, fund-of-fund portfolios, risk premia strategies, ETFs, GCC fixed income and Sukuk strategies for institutional, retail, and sub-advised clients. For multi-asset strategies and fund-of-fund portfolios, the Firm may invest in various investment strategies advised by registered investment advisory entities within Franklin Resources, Inc. or unaffiliated investment managers. The Firm includes Franklin Templeton Investment Solutions which integrates Franklin Templeton Multi-Asset Solutions and QS Investors, Franklin Mutual Advisers, Franklin ETF and Franklin Venture Partners in addition to Franklin Equity Group, Franklin Templeton Fixed Income Group, and Templeton Global Macro. The Firm is comprised of individuals representing various registered investment advisories of Franklin Resources, Inc., a global investment organization operating as Franklin Templeton.
Separately Managed Accounts (SMAS) are investment services provided by Franklin Templeton Private Portfolio Group, LLC (FTPPG), a federally registered investment advisor. Client portfolios are managed based on investment instructions or advice provided by affiliated subadvisors of Franklin Templeton. Management is implemented by FTPPG, the designated subadvisor or, in the case of certain programs, the program sponsor or its designee.
Franklin Income SMA Composite consists of all fully discretionary portfolios with an investment objective that seeks to maximize income while maintaining prospects for capital appreciation. The composite may include wrap fee accounts that pay a fully bundled fee (which includes trading expenses, administrative, custodial and investment management fees charged together as a percentage of the portfolio’s assets) and non-wrap accounts that only pay an investment management fee to Franklin. The portfolio will invest in equity and fixed income securities and Completion Portfolios (no-fee mutual funds) sub-advised by Franklin Advisers, Inc. The Equity Completion Portfolio may include common and preferred stock, equity linked notes, non- USD equities, equity derivatives. Through the Equity Completion Portfolio, the funds may purchase or write option contracts in order to manage equity price risk and may also invest in equity-linked securities. Equity-linked securities are hybrid financial instruments that generally combine both debt and equity characteristics into a single note form. The Fixed Income Completion Portfolio may include high yield bonds, bank loans, mortgage and asset backed securities, non-USD bonds, fixed income derivatives. Through the Fixed Income Completion Portfolio, the fund may invest in high yield corporate bonds that are below investment grade (rated lower than BBB).
The Custom Franklin Income Strategy Benchmark is equivalent to the Blended 50% MSCI USD High Dividend Yield Index + 25% Bloomberg US High Yield Very Liquid Index + 25% Bloomberg US Aggregate Index. The primary benchmark for the composite is a custom benchmark of 50% MSCI USA High Dividend Yield Index (USA High Div Yield) + 25% Bloomberg U.S. High Yield Very Liquid Index (High Yield Very Liquid) + 25% Bloomberg U.S. Aggregate Index (US Agg Index). The MSCI USA High Dividend Yield Index is designed to reflect the performance of mid- and large-cap equities (excluding REITs) with higher dividend income, which is sustainable and persistent, than average dividend yields of securities in the MSCI USA Index, its parent index. The Bloomberg U.S. High Yield Very Liquid Index is a component of the U.S. Corporate High Yield Index designed to track a more liquid component of the USD-denominated, high yield, fixed-rate corporate bond market. The Bloomberg U.S. Aggregate Index is a market value weighted fixed income index comprised of investment grade government, corporate, mortgage pass-through and asset-backed securities that are SEC registered, taxable, dollar denominated and fixed rate. The benchmark is rebalanced monthly. The secondary benchmark for the composite is the S&P 500 Index, which is a float-adjusted market capitalization weighted equity index comprised of securities of large cap U.S. companies.
All investments involve risks, including possible loss of principal. The allocation of assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Dividends may fluctuate and are not guaranteed, and a company may reduce or eliminate its dividend at any time. Equity securities are subject to price fluctuation and possible loss of principal. Investments in equity-linked notes often have risks similar to their underlying securities, which could include management risk, market risk and, as applicable, foreign securities and currency risks. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Active management does not ensure gains or protect against market declines. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. The investment style may become out of favor, which may have a negative impact on performance. The manager may consider environmental, social and governance (ESG) criteria in the research or investment process; however, ESG considerations may not be a determinative factor in security selection. In addition, the manager may not assess every investment for ESG criteria, and not every ESG factor may be identified or evaluated.
For fee schedules, contact your financial professional, or if you enter into an agreement directly with Franklin Templeton Private Portfolio Group, LLC (“FTPPG”), refer to FTPPG’s Form ADV Part 2A disclosure document. Management and performance of individual accounts may vary for reasons that include the existence of different implementation practices and model requirements in different investment programs.
To obtain specific information on available products and services or a GIPS Report, contact your Franklin Templeton separately managed account sales team at (800) DIAL BEN/342-5236.
Source: FactSet. MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This report is not prepared or endorsed by MSCI.
Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Source: FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com.
These materials are being provided for illustrative and informational purposes only. The information contained herein is obtained from multiple sources that are believed to be reliable. However, such information has not been verified, and may be different from the information included in documents and materials created by the sponsor firm in whose investment program a client participates. Some sponsor firms may require that these materials be preceded or accompanied by investment profiles or other documents or materials prepared by such sponsor firms, which will be provided upon a client’s request. For additional information, documents and/or materials, please speak to your Financial Professional or contact your sponsor firm.
Franklin Templeton (FT) is not undertaking to provide impartial advice. Nothing herein is intended to provide fiduciary advice. FT has a financial interest.
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