HEAD-TO-HEAD: Franklin Templeton versus Legg Mason

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Conclusion

The Franklin Templeton fund receives a two-star Morningstar rating and an analyst rating of Neutral, while the Legg Mason fund gets four stars and a Bronze analyst rating.

Morningstar’s star rating looks at historically-adjusted performance and the analyst rating is based on forward-looking analysis.

Ge prefers the Legg Mason fund over the Franklin Templeton option.

“When looking at the team, I think both stack up quite well in terms of experience, leadership and having ample support from analysts.

“That said, on the investment process side, the Franklin Templeton Asia strategy uses the same contrarian high conviction approach that their global bond products utilises. But the size of the Asia fixed income universe is much more limited compared to the global bond universe. So some of these high conviction ideas that they implement in the global bond funds are not as applicable in Asia,” he said.

Turning to the Legg Mason fund, Ge said that he has more conviction that the strategy will outperform its benchmark and peers over the long-term. He also added that the fund’s lower fees make the product more attractive.

However, he noted that some investors who are looking for strategies that are largely benchmark-agnostic may consider the Franklin Templeton fund.

“It is probably suitable for investors who are more patient, as some of the fund’s calls take a long-time to playout,” he said.

Meanwhile, those considering investment in the Legg Mason fund should be aware of its corporate bond allocation, as it can make the product more volatile compared to its peers, Ge added.

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