Franklin Templeton has reduced management fees on the W share classes of its FTF ClearBridge US Equity Income and Franklin US Opportunities funds, according to its Assessment of Value (AoV) report published on 23 August.
The firm will also reduce the fee cap across all of FTF Templeton Global Total Return Bond fund’s share classes, while changes will be made to the investment policy of FTF Martin Curry UK Managers’ Focus. This fund will also see a reduction in management fee in its W and S share classes.
Elsewhere, Franklin Templeton has proposed to merge its FTF Martin Currie UK Opportunities fund into the FTF Martin Currie UK Rising Dividends fund.
In total, Franklin Templeton’s board of directors found that all share classes of 17 funds have delivered value to investors over the year. However, five funds – FTF Franklin US Opportunities, FTF Martin Currie Asia Unconstrained, FTF Martin Currie Emerging Markets, FTF Martin Currie Global Unconstrained and FTF Templeton Global Total Return Bond – require enhanced monitoring and some changes despite delivering value overall.
The firm’s FTF Martin Currie Japan Equity was found not to have delivered value to investors on account of “significant underperformance” during three of the last five years to the end of March 2024. The portfolio will therefore see a change to its investment process, which Franklin said will be communicated to investors “at the earliest opportunity”. However, the fund’s annual management charge has already been reduced from 0.75% to 0.7% – a change which took place at the start of the month.
According to data from FE Fundinfo, FTF Martin Currie Japan Equity has lost 25.2% over five years to 27 August 2024, compared to its sector average and Topix benchmark’s respective gains of 35.3% and 36.1%.
Franklin Templeton’s board of independent non-executive directors, whose role is to oversee the firm’s process behind its AoV report, said: “We are pleased the process conducted by FTFML continues to be comprehensive and thorough and welcome the enhancements made to this year’s process as well as the improvements to the format of this report.
“The report highlights five funds where value has been delivered but action and/or enhanced monitoring is needed.
“TF Martin Currie Japan Equity fund has not delivered value consistently. To enable the fund to deliver value more consistently in future, we are developing a package of changes (including to the fund’s investment process) which we will communicate to shareholders at the earliest opportunity. Part of this package will be a reduction in the annual management charge for all share classes… In addition, the fund will continue to be subject to enhanced monitoring.”
It added: “We support the overall methodology framework, the process and this report of FTFML’s conclusions.”
This story first appeared on our sister publication, Portfolio Adviser.
