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Global options for local investors, fund managers and businesses

Plans allow diversification into international markets and protection against depreciation in the rand.

Investments, savings, pension, assets, money, cash, capital, personal wealth – regardless of the term used, it’s vital that it be looked after carefully and managed efficiently to ensure growth rather than decline. This principle applies if an investor’s portfolio exceeds R100 million or amounts to R10 000. For each, it represents their wealth.

Moneyweb asked Jo-Anne Bailey, Franklin Templeton Investments’ sales director and country manager for Africa, about its internationally renowned asset manager’s plans for retail and institutional investors in South Africa.

Franklin Templeton currently offers South African investors a choice of 41 investment funds that have been registered with the Financial Sector Conduct Authority (FSCA) for distribution in SA. These funds offer a wide range of international investment opportunities, each offering a specific focus.

Bailey says investors can gain access to a range of balanced global funds, equity funds or funds focusing on global fixed-interest securities. Investors can also get exposure to specific international and regional markets, or specific industries.

These global funds offer investors diversification into international markets and protection against depreciation in the rand as they are all either euro or US-dollar denominated funds, with the exception of the Franklin Japan fund which operates in Japanese yen.

As such, the value of the rand has a big effect on the returns, which are quoted in hard currency. The importance of investing in global funds has been proven during the current year, which saw the rand depreciate from R11.57 per dollar in February to the current level of around R14.30.

The advantages of investing in international funds are demonstrated dramatically if one considers that, since Templeton launched its first funds in SA in 1995, the value of the rand has dropped from R3.55 per dollar (January 3, 1995) to the current levels. Add to this the dollar returns the funds have achieved year after year.

Franklin Templeton offers a few very interesting funds, such as a fund investing in the so-called Brics countries. Due to the inclusion of fast-growing India and China, the fund has shown an annualised growth of 7.3% over the last five years, 13.6% over the last three years, and 9.7% over the past 12 months.

Other interesting funds include the Templeton Emerging Markets Small Companies Fund and the Franklin Technology Fund, both of which achieved high returns over one, three and five years.

Franklin Templeton offers investors exposure to specific countries (including India, Japan, China and Thailand) through focused funds, or exposure to certain regions, such as eastern Europe, the EU, Latin America, Africa, South America and Asia.

“We are planning to expand our range in SA and recently applied to the FSCA for registration of two global hedge funds,” says Bailey. “We will announce more details as soon as we receive approval from the FSCA.”

Investors are able to invest in Franklin Templeton’s funds through the offshore platforms as well as financial and investment advisors.

Bailey points out that they are also included in several fund of funds options managed by asset managers in SA, and are available to managers of defined benefit plans, defined contribution plans, endowment and insurance products, and even medical benefit funds.

Brought to you by Franklin Templeton Investments.

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