Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Templeton Global Income Fund (GIM) - increased usage of currency forward contracts
Old 05-09-2012, 07:35 AM   #1
Full time employment: Posting here.
sailor's Avatar
Join Date: May 2005
Location: Atlanta suburbs
Posts: 881
Templeton Global Income Fund (GIM) - increased usage of currency forward contracts

Few of us use GIM for international bonds exposure.
I'm reading the GIM semiannual report and noticed a lot of minuses in the currency exposure breakdown tables.
Than I see this:
"The Fundís Board of Trustees has authorized the Fund to increase use of currency forward contracts for hedging and investment purposes when the
investment manager believes it is advisable to do so."

Historically I've been pleased with this fund performance, I hope that excessive use of derivatives won't derail it.

sailor is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-09-2012, 08:57 AM   #2
Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,674
Good that you are reading the details. I don't get past the summary financial data. Brewer and some other folks here are more familiar with issues like you are raising. AFAIK you want either a hedged or an unhedged fund depending on whether you are concerned with currency exchange rates. I generally prefer unhedged but one is not necessarily better than another. Days like toady and with issues like the volitility of the Euro hedging may be a good thing. Anyway, this has been a good fund for me and I intend to hold it for a long term, if I sold it I would have to figure out what to buy and I am clueless except for maybe the new Vanguard fund.

T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 05-09-2012, 09:36 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
Join Date: Mar 2003
Posts: 15,910
Since I have a lot of faith in the people who manage GIM, I would not get excited about this change. I would guess that the use of currency derivaties would allow the manager to create synthetic positions in bonds where buying the actual bonds is either impossible, expensive or undesrable. For example, suppose you want Euro exposure but don't actually want to buy a specific sovereign in the EU. You might buy a US corporate bond, pair it up with a EUR currency forward and synthetically create a Euro denominated bond that does not have direct exposure to any of the EU sovereign credit names.
"Neither my companion or I carry firearms on our persons. We depend on the goodwill of our fellow man and the forbearance of reptiles."

- English Bob
brewer12345 is offline   Reply With Quote

gim, global bond, international, templeton

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


All times are GMT -6. The time now is 11:30 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.