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Various Changes to Franklin Templeton Funds

We have been notified by the Board of Directors of Franklin Templeton Investment Funds ("Franklin Templeton") of various changes to a number of its funds. These changes will take effect 28 March 2024 (the “Effective Date”)  

AVAILABLE IN OUR DEFINED FUND RANGE PRODUCTS

Franklin Templeton Investment Funds will be making changes to a number of its funds to formalise Environmental, Social and Governance ("ESG") investing principles and exclusions. 

 

From the Effective Date, changes will be made to the investment objective of the funds detailed in the table below (the “Affected Funds”). In light of investors demand, the Board of Directors of Franklin Templeton has decided to reclassify the Affected Funds from Article 6 to Article 8 under the European Union’s Sustainable Finance Disclosure Regulation (“SFDR”) and to create the required SFDR related disclosures. The SFDR is part of a package of legislative measures and seeks to strengthen disclosures made by asset managers and certain other financial services firms to their clients on the ESG characteristics of financial products.

 

Franklin Templeton note that these changes will better reflect the ESG considerations that have already been part of the investment process of the Affected Funds, with binding commitments to sustainability that are objective and data-driven, while maintaining its focus on value investing.

 

Affected Fund NameAffected Fund ISINProducts Affected in our Defined Fund Range
Franklin Mutual Global Discovery A Acc EURLU0211333025Oracle
Paragon
Quantum (inc. Malaysia variant)
Regular Savings Plan (inc. Malaysia variant)
LifePlan
Kudos
Protected Lifestyle
Franklin Mutual Global Discovery A Acc USDLU0211331839
Franklin India A Acc EURLU0231205187Oracle
Paragon
Quantum (inc. Malaysia variant)
Regular Savings Plan (inc. Malaysia variant)
Kudos
Franklin India A Acc USDLU0231205187

 

In addition, “Sustainability Risk” will be added to the list of Fund Specific Risks of the Affected Funds. Please refer to the Franklin Templeton notifications opposite for full details of the changes. 

 

Franklin Templeton state that the changes do not amount to material changes to the Affected Funds and are made solely to respond to the disclosure obligations resulting from the SFDR. While the portfolio composition and investment universe will be modestly impacted by the changes, ESG considerations were already part of the investment research and process of the Affected Funds.

 

As such, the changes will have no material impact on the investment philosophy and process of the Affected Funds, and there will be no material change or increase in the overall risk profile of the Affected Funds following the changes. 

 

Franklin India A Acc (in all currency variants) 

In addition, the investment policy of Franklin India fund (in all currency variants) is being enhanced to clarify that the investment manager may use financial derivative instruments for hedging and/or efficient portfolio management purposes.  The following paragraph will be added to the current investment policy of the fund: 

 

“The Fund may further utilise financial derivative instruments for hedging and/or efficient portfolio management. These financial derivative instruments may be dealt in either on Regulated Markets or over-the-counter, and may include, inter alia, swaps, forwards and futures contracts (including those on equity indices) as well as options (including warrants).”

 

“Derivatives Instruments risk” will therefore be added to the list of Fund Specific Risks of the Franklin India fund.

 

The use of derivatives for hedging and/or efficient portfolio management purposes was already permitted under the general provisions of the Prospectus. The changes detailed above will have no material impact on the way the Franklin India fund is managed, its portfolio’s composition, risk profile or SRI nor on the fees charged.

 

Please refer to the Franklin India Fund notification opposite for full details of the changes.  All other features of the Affected Funds remain the same. 

 

AVAILABLE IN OUR OPEN-ARCHITECTURE PRODUCTS

A number of Franklin Templeton Investment Funds which can be accessed through our portfolio bonds will also be subject to the changes detailed in the Franklin Templeton notifications opposite.

 

For more information on Franklin Templeton Investment Funds visit www.franklintempleton.lu