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Fund in Focus: Franklin Bissett Core Plus Bond Fund
12/10/2018 9:48:41 PM
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DUE DILIGENCE
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By Dave Paterson  | Wednesday, June 13, 2018


 



Over the past few years, Franklin Bissett has quietly grown out its fixed-income team, and the results are now starting to show. Franklin Bissett Core Plus Bond Fund was one of the strongest-performing bonds funds in 2017, gaining 2.9%, placing it in the first quartile for performance and outpacing its peers.

For the past 12 months (to May 31), the fund was down -1.0%, matching the FTSE/TMX Canada Universe Bond Index.

The fund’s goal is to provide strong risk-adjusted returns and a steady income stream over a full market cycle. To do this, the management team, headed by Tom O’Gorman, uses a process of top-down macro analysis and bottom-up sector and security analysis.

The team’s top down analysis looks at global economic trends, interest rate outlooks, growth and inflation expectations, central bank policies, and sector fundamentals. Using the macro view, the analysis helps the team determine the most attractive areas of the fixed-income universe, taking into consideration duration positioning, yield curve positioning, sector, country, and currency allocations.

The more granular bottom-up security analysis looks at individual issues, weighing relative value, duration, company financials, as well as fundamentals, management, and liquidity

The fund aims to deliver returns in excess of between 50 and 150 basis points over the benchmark, with a Canadian-focused mandate that allows the managers to invest across the Canadian fixed-income universe. Up to 25% of the portfolio can be held in high-yield issues. While the fund has a primarily Canadian focus, it can still invest up to 30% outside of Canada, of which 10% of currency exposure can be unhedged.

As of April 30, the portfolio was allocated 62% to corporate bonds, 34% to government issues. Given the flexibility of the fund’s mandate, its active management style, and its well-diversified portfolio, this fund has the potential to outperform in a volatile bond market.

Franklin Bissett Core Plus Bond Fund
Fund company:
Franklin Templeton Investments
Fund type: Canadian Fixed Income
Rating: A (May)
Style: Top-down macro; bottom-up security selection
Risk level: Low
Load status: Optional
RRSP/RRIF suitability: Good
Manager: Thomas O’Gorman since July 2010; Darcy Briggs since May 2015
MER: 1.49%
Fund code: TML200 (Front-end load)
Minimum investment: $500

Dave Paterson, CFA, is the Director of Research, Investment Funds for D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due diligence on a variety of investment products. He is also the publisher of Dave Paterson’s Top Funds Report, offering regular commentary and in-depth analysis of Canada’s top investment funds. He uses a unique analytical approach to identify funds with strong, risk-adjusted returns, and regularly publishes his insights and analyses in Fund Library.

Notes and Disclaimer

© 2018 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

Commissions, trailing commissions, management fees and expenses all may be associated with fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be repeated. No guarantee of performance is made or implied. This article is for information purposes only and is not intended as personalized investment advice.

 

 
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