Launched on 30 August, the Franklin GCC Bond Fund is a sub-fund of the firm’s Luxembourg domiciled Sicav range. It will invest in fixed or floating-rate debt securities and obligations issued by government, government-related or corporate entities located in Gulf Corporation Council member countries.
In addition, Franklin Templeton said the fund may also purchase similar securities and obligations issued by entities based in the wider Middle-East and North Africa (MENA) regions as well as supranational entities organised by several national governments, such as the International Bank for Reconstruction and Development.
Mohieddine Kronfol, chief investment officer, global Sukuk and MENA fixed income at Franklin Templeton Investments in Dubai, is the lead manager of the fund, supported by portfolio manager Sharif Eid and senior research analyst Franck Nowak.
“The GCC region has some of the world’s strongest credit metrics and is endowed with 30% and 20% of the world’s proven oil and gas reserves, respectively,” said Kronfol.
“Regional debt markets have been developing rapidly over the past 10 years and have achieved scale in terms of market size, issuance volumes and trading activity.
“We believe the outlook for regional debt markets is extremely positive as GCC countries continue to develop external as well as domestic money, bond and Sukuk markets. We expect GCC markets to continue delivering strong risk adjusted returns with low correlations to major fixed income and equity markets.”
Available initially in the Middle East region, Franklin Templeton said the fund "can be made available to international investors in the 50 plus countries where our funds typically get distributed, depending on client demand".
Franklin Templeton Investments (ME), formerly Algebra Capital, was established in 2006. The Dubai based investment team offers a range of MENA, GCC and East and Emerging Asia equity, fixed income and Sukuk strategies.
