Investment Product Launches for the Week

Franklin Templeton Investments announced the launch of Franklin Flexible Alpha Bond Fund, which, according to the firm, aims to provide attractive risk-adjusted total returns over a full market cycle by allocating its portfolio across a broad range of global fixed-income sectors.

Michael Materasso, senior vice president and co-chair of the Franklin Templeton fixed-income policy committee, says the recent concerns with respect to rising interest rates and the related desire for additional diversification in the fixed income markets led to the development of the fund.

“We believe Franklin Flexible Alpha Bond Fund should fulfill investors’ rapidly growing demands for an alternative to traditional core fixed-income allocations,” he adds. “The fund seeks to complement traditional fixed-income asset classes by potentially providing low correlation to conventional holdings.”

According to Franklin Templeton, the fund aims to provide attractive risk-adjusted returns generated from various sources—other than primarily from interest rates—by allocating the fund’s portfolio across various risks such as credit, currency, and duration risks. In employing this strategy, the fund’s portfolio managers will have the flexibility to invest across all sectors of fixed income of any country, sector, quality, maturity or duration, and without reference to a benchmark index.  

“We take an unconstrained investment approach with dynamic sector rotation, active currency management, security selection and relative value positioning, while aiming to manage various risks, such as duration,” says the fund’s co-lead manager, David Yuen, also a senior vice president and director of quantitative strategy and risk management for Franklin Templeton.

NEXT: American Century Alternatives 

American Century Investments announced the expansion of its line of alternative mutual funds and the creation of a new brand, AC Alternatives.

The firm says it is expanding its alternatives footprint “as client preferences shift toward strategies designed to help investors manage volatility, balance market downturns and improve diversification.”

The suite of mutual funds offered under the expanded AC Alternatives brand includes the new sub-advised multi-manager AC Alternatives Income Fund and two existing American Century-managed mutual funds, Equity Market Neutral and Market Neutral Value. The latter two have been rebranded with the AC Alternatives moniker, according to the firm.

American Century has engaged Perella Weinberg Partners Capital Management to provide investment management and allocation services and to recommend and interact with sub-advisers for AC Alternatives Income, as well as two other multi-manager funds expected to launch in the coming months.

More information about American Century’s new brand and alternative funds is at www.ACAlternatives.com. The new, tablet-optimized website features background on liquid alternatives, including insights from investment professionals, videos and other tools designed to help investors make informed decisions when considering alternative investments.

NEXT: Morningstar ESG capabilities expanded

Morningstar announced plans to launch its first environmental, social and governance (ESG) scores for global mutual and exchange-traded funds later this year.

Morningstar will base the scores on ESG company ratings from Sustainalytics, a provider of ESG and corporate governance ratings and research. Swiss private banking group Julius Baer will be the first Morningstar client to license the ESG scores for its fund research team.

Jon Hale, Morningstar's director of manager research, North America, says Morningstar “has a long tradition of innovative research centered on good stewardship, lower costs, and more transparency for investors.”

“Providing fund scores on environmental, social and governance factors is a natural extension of our work,” Hale says. “We want to bring even greater transparency and accountability to the investment industry with ESG research, data, and tools, while helping investors to put their money to work in ways that are meaningful to them.”

Morningstar says Sustainalytics has provided ESG research and analysis for more than 20 years. The company has a global reach with 230 employees, including 120 analysts who have geographic and sector expertise. The analysts focus on the relevant ESG issues within industries and across markets, assigning each company under coverage approximately 70 indicator-level scores related to environmental impact, social practices, and governance policies and procedures.

“ESG considerations, once viewed from the sidelines, are increasingly front and center for fund investors,” adds Michael Jantzi, chief executive officer of Sustainalytics. "We applaud Morningstar for its innovation and look forward to working together to create a new standard for fund benchmarking.”