Franklin US Investment Grade Long Duration Credit Strategy

The Franklin US Investment Grade Long Duration Credit strategy seeks to add alpha through efficient portfolio construction and deliver resiliency during adverse credit markets. Managed by a group of experienced credit portfolio managers and supported by one of the industry's largest corporate credit research teams, this strategy harnesses proprietary quantitative models, bottom-up fundamental research, and disciplined risk management. This helps us to build portfolios engineered to achieve clients’ desired outcomes. The strategy makes little to no use of out-of-benchmark security types. We prefer to own only liquid, cash bonds.

Our robust portfolio construction methodology:

• Systematically identifies benchmark inefficiencies and optimizes portfolios to maximize return from roll-down and risk adjusted carry
• Builds portfolios around our best idiosyncratic ideas from traditional credit research
• Stress tests portfolios through different interest rate and credit environments to achieve more favorable outcomes in adverse markets
• Can provide an independent alpha source through more efficient portfolio construction that is additive to security selection and sector allocation alpha
• Aims to deliver low excess return correlations to our top competitors, making the strategy complementary to top industry peers
• Has historically delivered outcomes that are uncorrelated with the movement of credit spreads, achieving the intended outcome of generating alpha through other means than simply capturing and maximizing beta

The investment team recognizes that credit benchmarks are inherently inefficient, and that active management should therefore be able to generate excess returns through all market cycles. It is our core belief that our intentional portfolio construction process can exploit these market inefficiencies and serve as an additional source of potential alpha alongside sector allocation and bottom-up security selection. The process is delivered by an experienced, well-resourced corporate credit research team.