Franklin Templeton has been downgraded by Moody's due to the "volatile" performance of its value equity and bond funds, which the rating agency believes is causing an"erosion" of the US fund manager's business.

Moody's said on June 4 that it had downgraded the senior unsecured rating of Franklin Resources — the holding company for the fund manager — to A2 from A1. It also downgraded a raft of other debt tranches by one grade.