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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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What's up with Templeton Global Bond?

I loved this fund as a diversifier. Now it seems to be lagging quite a bit for a good 5 years or more.

Is all well at Templeton?


  • I took a look on Schwab & appears time to be moving on if one owns this fund !
  • I think this has always been more of a “currency fund,” along with the other Hassenstab fund. And with the dollar having been the least weak currency over the last several years (especially since zero rates have reigned in many European countries), foreign currencies have done (large/high level trends) poorly vs the dollar.

    I think Hassenstab is part of the “I’m going to invest according to my views, because I’m RIGHT, dammit,” crowd....some other members of that club include Arnott (PAUIX/PAAIX has been overweight EM bonds for years). Well, a stopped clock can be right twice a day....agree with the above sentiment. Time to move on.:)
  • My impression is they made big bets on Argentina and it really burned them.
  • TGBAX is both a bond fund and a currency fund. Hassenstab seems to invest in bonds anywhere in the world based on how he expects those bonds to perform independent of currency movements. In that sense, one can think of the fund as a hedged international bond fund.

    But rather than hedging back to the dollar, he takes these assets and makes big currency bets. He can be long on country A's bonds while being short on country A's currency. So he not only decouples bonds from currency, he extensively plays the currency markets as well.

    Lewis is correct that Argentinian bonds burned the fund. While in the long term I expect the fund to do well, this shows the risks one takes in concentrated portfolios. A manager's best ideas sometimes are not all that good.
    His unusual approach: concentrating investments in a handful of countries that he surmised would offer the highest returns without defaulting. He became a major lender for countries such as Uruguay, Ghana and Ukraine, and government officials routinely visited him seeking his investments.

    The fund has been a great diversifier, though. No matter which way your other funds moved, this fund did not move the same way. That's because it hasn't been moving in any direction - returning roughly nothing for the past few years.

  • He also went big into Ukraine debt a few years ago - not sure how that turned out, as I was long out of the fund by then.

    My impression is they made big bets on Argentina and it really burned them.

  • I can't believe that with the resources Templeton has, and their history of global investing, that this fund will be another FAIRX / CGMFX.

    I don't mind a contrarian (value investors generally are) manager, and waiting for one's ships to come in, but I think this exemplifies so-called "manager risk".
  • I owned it years ago for just a short time. PIMIX was so much better. I realized years ago TGBAX has higher bets on currency and EM bonds. The fund was great during 2008-9. Yes, it's another PAUIX and FAIRX :-)
    I owned PIMIX and FAIRX for years.
    As long as the fund has a great performance I'm in when it's over I'm gone.
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