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Templeton Frontier Markets Fund launched

By on July 22, 2011

Franklin Templeton Investments Corp. launched today the Templeton Frontier Markets Fund, a first-of-its-kind emerging markets fund to be managed by investing guru Mark Mobius and his team.

The fund will invest at least 80 per cent of its net assets in frontier markets – countries with smaller economies that are in the early stages of development. These 61 countries show strong economic growth and include Bangladesh, Sri Lanka, Azerbaijan, Romania, Jordan, Tunisia, Columbia, Paraguay, Kenya and Zambia.

“To capitalize on a changing world, Franklin Templeton’s global team looks at countries that are similar to what China or India were like two decades ago,” said Mobius, lead manager of the fund. “Between 2001 and 2010, nine of the 10 fastest-growing economies in the world were frontier markets, places such as Kazakhstan, Nigeria and Mozambique.”

A frontier markets portfolio often has lower volatility because there is little correlation between the vastly different economies, he said. For example, Estonia is little affected by events in Lebanon, and vice versa.

“In an era of mature growth in developing countries, Canadians need to look to new frontiers for investment opportunity,” Mobius said. “Step one is understanding which markets will rise, and step two is getting in on the ground floor.”

Mobius has spent more than 40 years working in emerging markets all over the world. He joined Franklin Templeton Investments in 1987 and is the Executive Chairman of the Templeton Emerging Markets Group. An investment management team of 80 work on the ground in 17 offices across Asia, Africa, Latin America, Eastern Europe and the Middle East. The group manages more than $45-billion, including $1.3-billion in frontier markets.

The new fund has a counterpart that is part of Franklin Templeton’s Corporate Class structure. The structure allows investors to switch between funds and portfolios while deferring taxable events until they redeem.

The fund’s launch follows Franklin Templeton research that shows Canadian investors believe emerging markets represent the greatest investment opportunity over the next decade. More than one third of Canadians (38 per cent) cite emerging markets, particularly Asia, as the best place to invest.

“Investors have a growing appetite for emerging markets,” Don Reed, president and CEO of Franklin Templeton Investments Corp. said today at the annual Franklin Templeton Investment Forum at Roy Thomson Hall in Toronto. The forum is Canada’s longest-running educational event for the investment community. “Capitalize on a Changing World” is the theme of this year’s event.

“Franklin Templeton is seeing investment opportunities that span the globe, from frontier and emerging markets to the developed economies of Europe and North America,” said Mr. Reed at the forum.

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