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Franklin Euro Government Bond Fund - News
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Fund Name Changed
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Friday, 10 July 2015
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Official Announcement
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The Templeton Euro Government Bond Fund will change it's name to Franklin Euro Government Bond Fund, effective from 10 July 2015
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Templeton Euro Government Bond comment - Jun 10
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Thursday, 26 August 2010
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Fund Manager Comment
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FTIF Templeton Euro Government Bond Fund recorded a net return of -0.91% (A (Ydis) shares in euros) for the quarter ended 30 June 2010, compared with a return of 0.28% for the fund's benchmark, the Barclays Capital Euro Government Bond Index.
Concerns about the sustainability of the global economic recovery mounted over 2010's second quarter as the eurozone's sovereign debt crisis culminated in a substantial bailout mechanism, along with a variety of individual fiscal austerity packages. Despite an unprecedented €110 billion rescue package to address the Greek government's financing needs, risks of contagion increased dramatically. Faced with this situation, European Union (EU) leaders and the International Monetary Fund (IMF) agreed on a series of emergency measures totaling €750 billion, which should be more than enough to cover the funding needs of Portugal, Spain and Ireland over the next three years. The European Central Bank (ECB) announced that it would provide sufficient liquidity to financial institutions and restore the smooth functioning of the financial market, and it also launched outright purchases of sovereign bonds.
The recently enacted austerity packages, in turn, led the ECB to reduce its growth forecast for 2011. In early June, however, the ECB raised its cautious growth forecast for this year, to a midpoint of 1% (from a previous forecast of 0.8%), thanks to the global rebound. Some countries have been doing better than others. Aided by a weakening euro, Germany's strong export base has been a prime beneficiary of the rebound in the rest of the world, while other countries with less to offer-notably Greece-continue to languish. But there are potential hints of a reasonable recovery even in some countries whose fiscal woes have been hitting the headlines. In late spring, business surveys in Spain, Ireland and Portugal all pointed to an improvement in domestic spending as well as stronger export activity.
As the quarter wore on, the fund's returns were hurt as investor unease grew about the financial prospects of select countries in which FTIF Templeton Euro Government Bond Fund had allocations. Due to a flight to quality, our exposure to weaker-performing euro-denominated emerging market names hurt results as investors shifted their focus to core eurozone bonds. In contrast, sector allocation, as well as duration and yield-curve positioning, benefited performance.
Outlook
During the period, governments in the main eurozone economies-Germany, France, Spain and Italy-announced fiscal austerity packages. The political strains associated with such packages have been increasing, while these same measures could depress growth prospects as we move closer to 2011. Already, the ECB has reduced its growth forecast for 2011 (to about 1.2%) because of domestic demand constraints. Likewise, official economic forecasts in the UK have been lowered for the period 2011-2015. In addition, estimates of the UK budget deficit have also been lowered, even as the incoming government has said it will significantly accelerate deficit reduction in the budget by raising taxes and cutting public spending.
But, importantly, from an investor's perspective, expectations for Europe are generally so low that we believe individual opportunities may arise in oversold markets should Europe continue to benefit from strong growth in other regions and should Europe's policymakers manage finally to cap sovereign default risks in individual countries. We expect that the enactment and funding of a €440 billion European Financial Stabilization fund in May (the centerpiece of a €750 billion bailout mechanism for the euro) could go some way in helping Europe's most-troubled economies to meet their financing needs, as could the ECB's purchases of eurozone sovereign debt. Furthermore, while countries like Spain, Ireland and Greece are being forced into dramatic cutbacks in government spending, the measures announced in other larger countries are somewhat less dramatic. And while austerity measures may put pressure on European domestic demand in the short term, we believe the form this austerity is taking in a number of countries-the raising of the minimum retirement age and cuts in welfare entitlements and current government spending (including wage cuts or reductions for public servants)-may prove beneficial to European economies in the medium term.
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Name change
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Tuesday, 8 December 2009
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Official Announcement
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The Templeton Euroland Bond Fund has changed name to the Templeton Euro Government Bond Fund
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