Franklin Templeton has launched a new fund in Hong Kong that seeks to harness yield opportunities in high-quality global bonds.

The Franklin Global Low Volatility Bond Fund primarily invests at least 65% of its net asset value in investment-grade debt securities issued by governments and government-related entities, including supranational organizations supported by several national governments.

Designed to capitalize on global yield opportunities across various market segments, the low-volatility strategy also emphasizes active duration management to ensure that portfolio volatility is controlled within the target limit.

The fund is managed by a dedicated and long-established fixed income team. Hang Seng Bank currently serves as the distributor in Hong Kong.

“The fund focuses on high-quality assets within global bond markets, which have historically exhibited lower volatility, offering a strong foundation for long-term investment strategies and potentially greater resilience through periods of market volatility,” says Simon Wong, co-head of Hong Kong and head of retail sales, Greater China, at Franklin Templeton.

“Designed to capture income opportunities for investors, the fund will endeavour to maximize total investment return, combining consistent dividend income with long-term capital appreciation.”

The fund offers monthly distribution share classes, which aim to pay dividends on a monthly basis. Dividends are not guaranteed. The fund may pay dividends out of the capital of the fund.

Chris Siniakov, managing director, fixed income, Franklin Templeton, notes that the US economy is expected to maintain a strong growth momentum in 2025. “The re-election of President Donald Trump should provide robust support to the US market due to significant changes in economic policy. Earnings-friendly tax cuts and deregulation, accompanied by supportive macroeconomic fundamentals, are set to foster investment and economic growth. In addition, we see that the US Treasury has shown relative stability in the year following the Fed’s initial rate cut,” he says.

“On the other hand, non-US corporate credit and emerging market bonds might be impacted by major shifts in US policies. Therefore, our investment strategy will focus on selecting issuers and sectors that are somewhat insulated from US policy fluctuations,” Siniakov adds.