Franklin Templeton Launches New Emerging Markets Sustainability Fund for European Investors

LUXEMBOURG and LONDON, October 12, 2020 /3BL Media/– Franklin Templeton¹ announced on September 30, 2020 the launch of the Templeton Emerging Markets Sustainability Fund – a sub-fund of the Luxembourg-domiciled Franklin Templeton Investments Funds (FTIF)² range. This new fund will be co-managed by Edinburgh-based Andrew Ness and Singapore-based Chetan Sehgal, Portfolio Managers at Franklin Templeton Emerging Markets Equity (FTEME) team, who also co-manage the successful Templeton Global Emerging Markets strategy.

The fund’s investment objective is to seek capital appreciation by primarily investing in companies that are domiciled, incorporated or listed in developing or emerging markets (EM) globally and demonstrate good or improving sustainability criteria. The fund seeks companies whose products and services are aligned to one or more of the six positive outcome areas linked to the UN Sustainable Development Goals (SDGs). The six positive outcome areas³ are: Basic Needs, Wellbeing, Decent Work, Healthy Ecosystems, Climate Stability, and Resource Security.

The fund will also apply specific ESG exclusions and will not invest in companies that are involved in weapons, tobacco, coal and unconventional oil and gas extraction, or whose actions have violated the United Nations Global Compact.

Proprietary three-pillar ESG inclusion framework

The fund will aim to invest in a high conviction portfolio of 30-50 emerging markets stocks with a five-year investment horizon. ESG analysis is a key part of the investment process and each investment will be analysed to meet the criteria of the proprietary bottom-up three-pillar ESG inclusion framework, that measures the:

1. Company’s alignment to positive environmental and/or social areas,
2. Intentionality to maintain or improve the ESG footprint of the company’s operating model, and
3. Transition potential for improvement through engagement as active owners.

Andrew Ness said: “Our rigorous and holistic three-pillar ESG inclusion framework means that, as well as companies that demonstrate good sustainability criteria, we can invest in companies that may be imperfect and create investor impact by pro-actively engaging with these companies to improve. We believe that our core role as stewards of our clients’ capital is to engage in its responsible allocation, management and oversight to create long-term value for our investors.”

Julie Moret, Global Head of ESG, Franklin Templeton, commented: “Our philosophical focus is on positive and improving sustainability inclusion. The fund adopts a proprietary framework that reflects key emerging market megatrends such as demographic shifts, urbanisation and technological innovations, which open up new opportunities from improving awareness of sustainability issues in emerging countries.”

Julian Ide, Head of EMEA distribution, Franklin Templeton, concluded: “Our commitment and reputation as an emerging markets expert over multiple decades means that we are seen as a long-term investment partner by companies and countries. We are delighted to offer our first dedicated EM-focused sustainability fund to European investors looking to invest for capital appreciation, which offers alignment to positive outcomes and addresses the growing investor demand for these products.”

Franklin Templeton Emerging Markets Equity (FTEME) is one of the largest dedicated emerging markets managers in the industry with over 80 dedicated EM investment professionals in 15 countries managing a variety of global, regional, single-country and specialty strategies. FTEME has been honing its investment approach for over 30 years, and the team is highly experienced in leveraging its extensive locally-based emerging markets resources, access and expertise, combined with an integrated and global investment perspective. The team’s longstanding approach is focused on developing deep proprietary perspectives on investments through a long-term lens. The team is further supported by the Franklin Templeton ESG and investment risk teams and has over US$30 billion in assets under management as of August 31, 2020.

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For more information please visit www.franklintempleton.lu.

Contacts:

Notes to Editors:

1. Franklin Resources, Inc. [NYSE:BEN] is a global investment management organisation with subsidiaries operating as Franklin Templeton and serving clients in over 165 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company brings extensive capabilities in equity, fixed income, alternatives and custom multi-asset solutions. With offices in over 30 countries and 1,300 investment professionals, the California-based company has more than 70 years of investment experience and approximately $1.4 trillion in assets under management as of August 31, 2020. For more information, please visit www.franklintempleton.lu and follow us on LinkedIn, Twitter and Facebook.
    
2. Templeton Emerging Markets Sustainability Fund is a sub-fund of Franklin Templeton Investments Funds (FTIF), a Luxembourg-domiciled SICAV. Subscriptions to shares of FTIF can only be made on the basis of the current prospectus, and, where available, the relevant Key Investor Information Document, accompanied by the latest available audited annual report and the latest semi-annual report if published thereafter. The value of shares in FTIF and income received from it can go down as well as up, and investors may not get back the full amount invested. 

   Past performance is not an indicator or a guarantee of future performance. Currency fluctuations may affect the value of overseas investments. When investing in a fund denominated in a foreign currency, your performance may also be affected by currency fluctuations. In emerging markets, the risks can be greater than in developed markets.

   An investment in FTIF entails risks, which are described in the FTIF’s prospectus and, where available, the relevant Key Investor Information Document. Investments in derivative instruments entail specific risks that may increase the risk profile of the fund and are more fully described in FTIF’s prospectus and where available in the relevant Key Investor Information Document. References to particular industries, sectors or companies are for general information and are not necessarily indicative of a fund’s holding at any one time.

   No shares of FTIF may be directly or indirectly offered or sold to nationals or residents of the United States of America. Shares of FTIF are not available for distribution in all jurisdictions and prospective investors should confirm availability with their local Franklin Templeton Investments representative before making any plans to invest.
    

3. The six positive outcome areas were developed at Cambridge University with the asset management industry and mapped to the UN SDGs as per this report “In search of impact: Measuring the full value of capital. Update: The Sustainable Investment Framework”; Cambridge Institute for Sustainability Leadership; January 2019.

Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes and is provided to you only incidentally.

Please consult your financial advisor before deciding to invest. A copy of the latest prospectus, and, if available for this product, the relevant Key Investor Information Document, the annual report and semi-annual report, if published thereafter can be found, on our website www.ftidocuments.com or can be obtained, free of charge, from Franklin Templeton International Services S.à.r.l. supervised by the Commission de Surveillance du Secteur Financier -8A, rue Albert Borschette L-1246 Luxembourg - Tel: +352-46 66 67-1 - Fax: +352-46 66 76.

Issued by Franklin Templeton International Services S.à r.l.

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