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FX woes hit giant Franklin fund

US asset manager Franklin Templeton's Global Bond Fund has grown by $85bn over the past three years but has struggled with its currency positions in 2011, according to analysts at JP Morgan

Franklin Templeton’s giant global fixed-income fund, which has grown by over $80bn over the past three years, has struggled in 2011 on the back of misplaced foreign exchange trades. This mirrors the troubles of dedicated currency managers this year.

Franklin's Global Bond Fund has grown from $19bn in 2008 to $104bn today. But according to a research note from JP Morgan Cazenove: "The flight to quality has sent the fund's long FX positions falling (including Korean Won, Malaysian Ringgit and Polish Zloty) while some of the fund's short FX positions (Japanese Yen) [are] strengthening."

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