Our latest video features Franklin Templeton director of Australian fixed income, Andrew Canobi. He explains the unique investment strategy behind the Franklin Australian Absolute Return Bond Fund.
The fund reconstructs bond portfolios from the ground up, beginning with cash and then carefully selecting specific opportunities that make sense for Australian investors still looking for defensive returns with lower capital volatility. By targeting returns of 2-3% per annum before fees over the cycle, the fund is able to meet expectations for clients who want income from bonds with a much lower level of volatility.
In the video and accompanying article, Canobi explains that by adopting an absolute return approach investors can continue to access bond portfolios that can deliver attractive returns above cash whilst reducing some of the volatility risks now present in bond benchmarks.