Leave Average Fixed Income Behind.

Active strategies that take you beyond the bond index

Active Fixed Income Overview

Why Go Active?

For many Canadians, the “simple” days of fixed income investing appear to be over. For years, passive fixed-income investing through indexed products could offer steady returns at low risk. But now, there is uncertainty about the direction of interest rates, central banks are normalizing their monetary policies and inflation has returned. Also, investors face the prospect of a slower global economy, persistent trade tensions and lower bond yields in developed markets.

Today, fixed income investors face more complexity. While they want their fixed income investments to generate yield and returns, they also want to manage risk in an increasingly uncertain environment. Here are three reasons why Canadians need to take an active approach to fixed income investing.

OUR ACTIVE FIXED INCOME SOLUTIONS

Add stability and income with high quality corporate bonds

With uncertainty in the markets, professional managers can actively navigate the corporate bond market to identify high quality bonds which offer investors:

  • Stability through steady income
  • Attractive yield opportunities
  • Portfolio diversification through low correlation to other fixed income asset classes

We offer two corporate bond ETFs:

FLCI – Franklin Liberty Canadian Investment Grade Corporate ETF: Seeks to provide investors with long-term capital growth and steady income by investing primarily in high-quality Canadian investment grade corporate bonds.

FLUI – Franklin Liberty U.S. Investment Grade Corporate ETF: Seeks to provide investors with capital preservation and income by investing primarily in high-quality U.S. investment grade corporate bonds with a Canadian-dollar currency hedge to smooth out any fluctuations in currency exchange rates.

We also offer a core bond strategy with a generous allocation to corporate bonds, if you prefer a one-stop fixed income solution. This strategy is offered both as an ETF and a mutual fund trust.

Franklin Liberty Core Plus Bond ETF/Franklin Bissett Core Plus Bond Fund: Seeks a high current income and some long-term capital appreciation by investing primarily in Canadian federal and provincial government and corporate bonds, debentures and short-term notes. The fund maintains an overweight in high-quality corporate and provincial issues, relative to Canadian federal bonds. The fund may also invest in foreign securities.

Manage interest rate risk with floating rate bank loans

With interest rates potentially on the rise, bank loans have interest payments that reset periodically in tandem with changes in the market rate. As a result, an actively managed portfolio of bank loans can offer investors:

  • Attractive yield opportunities, especially during periods of rising interest rates
  • Portfolio diversification through low correlation to other fixed income asset classes

We offer the following bank loan solution:

FLSL – Franklin Liberty Senior Loan ETF: Seeks to provide a high level of current income and preservation of capital by investing primarily in senior, secured, income-producing floating rate corporate loans made to, and corporate debt securities issued by, U.S. and non-U.S. entities.

We also offer a short duration strategy to help manage interest rate volatility. This strategy is offered both as an ETF and a mutual fund trust.

Franklin Liberty Short Duration Bond ETF/Franklin Bissett Short Duration Bond Fund: Seeks a high current income and preservation of capital by investing primarily in Canadian fixed-income securities including Canadian federal and provincial government bonds, corporate bonds, debentures and short-term notes. The strategy may also invest in securities backed by mortgages or other financial assets, dividend-paying shares of Canadian companies and may invest in foreign fixed-income securities. The average weighted term-to-maturity of the strategy’s investments is five years or less.

Expand and diversify your income opportunity set with global bonds

It’s hard to keep track of which markets around the world are poised to perform, especially because winners rotate. What’s more, many Canadian investors demonstrate a “home country bias” and miss out on opportunities found outside of local borders. Global bonds can offer investors:

  • Access to a broad range of bond markets and sectors around the world
  • Opportunity to participate in different currency markets
  • Yield opportunities beyond Canada

Our global bond solutions include:

FLGA – Franklin Liberty Global Aggregate Bond ETF: Seeks to maximize total investment return, consisting of a combination of interest income and capital appreciation by investing primarily in investment grade fixed or floating-rate debt securities issued by governments, government related entities (including supranational organizations supported by several national governments) and corporations worldwide.

Insights & Resources

Strengthen Your Fixed Income Exposure

Highlights the Franklin Bissett Core Plus Bond Strategy and Franklin Bissett Short Duration Bond Strategy, which are available in mutual fund and now in ETF.

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Franklin Liberty Canadian Investment Grade Corporate ETF

Highlights key reasons why investors should consider this ETF.

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Franklin Bissett Core Plus Bond Fund

Seeking out the best yield opportunities while linking volatility.

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