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Big Bets Come Back To haunt Franklin Templeton's Global Bond Fund
FYI: The $44 billion Templeton Global Bond Fund (TGBAX) is probably not what most financial advisers would expect from a strategy in such a bland and stoic category as world bond funds.
On the contrary, the fund is exactly what most advisors expect. Those who saw Mr. Hasenstab's unique style and were early to the fund have done well for their investors. Virtually every manager will have a period of 2-3 year span of underperformance. Just as the hot money flowed into TGBAX after it's returns were great, 2005-2010, the same performance-chasing money is now moving out. Nothing has changed from a strategy or philosophy standpoint, but the bets the last couple of years have not paid out. They may do so yet. Contrary to M* comments, advisors and investors who actually take the time to know this fund have never expected it to be tame and run for capital preservation. It is a different vehicle that happens to own bonds, like it or not. It has been a big diversifier for portfolios over its long history with Hasenstab at the helm. We captured some long-term gains late last year and early this year, moving dollars to VTABX, thereby splitting international bonds into two very different pots.
I disagree. I owned a bunch of this several years ago. Viewed the fund as a series of discrete bets on currency movements (utilizing relatively low-credit-risk sovereign bonds as the means to make those bets).
When I first found out about his big bets in Ukrainian bonds, after the Russian aggression, I decided to exit. -- The risks Hassenstab is taking with his investors bond money doesn't suit me.
Comments
I owned a bunch of this several years ago. Viewed the fund as a series of discrete bets on currency movements (utilizing relatively low-credit-risk sovereign bonds as the means to make those bets).
When I first found out about his big bets in Ukrainian bonds, after the Russian aggression, I decided to exit. -- The risks Hassenstab is taking with his investors bond money doesn't suit me.