GCC countries offer the growth potential of emerging economies with many of the fundamentals of developed markets. This strategy provides the opportunity to invest in a bond market that has expanded significantly over the last decade.
Strategy Overview
The strategy’s investment objective is to maximize total investment return by investing in issuers from, or that conduct substantial business in, the Gulf Cooperation Council (GCC) region.
Access to rapidly growing economies and an expanding bond market
Fundamental research performed by local regional analysts
The strategy is managed by a local, dedicated investment team with full access to the global insights and expertise of fixed income investment, trading and risk professionals within Franklin Templeton’s well-established, integrated global platform.
Institutional Quality Risk Management
Our comprehensive risk management framework integrates a variety of risk measures and perspectives to ensure that all risks are recognized and intentional. Our robust, institutional-quality approach ensures that the risks taken are consistent with the investment team’s in-depth research and investment outlook.
Our Philosophy
While various factors can cause markets and securities to trade independently of their underlying fundamentals for periods of time, markets are efficient in the longer-term. We assign significant resources to identify and exploit these inefficiencies. We believe that an actively managed portfolio of lowly-correlated positions, selected on the basis of intensive bottom-up research, combined with quantitative science, and guided by top-down macroeconomic analysis, has the potential to deliver above-benchmark returns over a full market cycle.
Our Investment Process
This is a general depiction of the investment team's methodology and may not reflect the exact investment process for any particular strategy.
Bottom-Up Analysis: The team evaluates and rates the regional universe through forward-looking financial models, internal credit calculations and relative value analysis. Based on their findings, the team assigns a recommended weighting (ranging from 0–6%) to each of the issuers.
Model Portfolio: The team’s model portfolio contains what they consider their best ideas. Securities may be added and removed in accordance with guidelines and risk analysis. Weightings are free of any portfolio or client bias and are solely based on the team’s assessments.
Portfolio Implementation: Based on an iterative optimization process, portfolio managers will add and adjust positions to ensure the final portfolio complies with guidelines and is expected to achieve target risk and return objectives.
Investment Team
The GCC Bond strategy is managed by an experienced team of investment professionals—two portfolio managers, including the strategy’s Chief Investment Officer, Mohieddine (Dino) Kronfol and three research analysts. In addition, the GCC Bond Team is part of Franklin Templeton Fixed Income, which is comprised of investment professionals globally. The investment team is also supported by Franklin Templeton’s global resources, including global risk, compliance and operational functions. This integrated structure benefits the research, portfolio and risk management for Franklin GCC portfolios.
Mohieddine Kronfol
Chief Investment Officer, Portfolio Manager
Industry since: 1996
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Important Information
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.