One of my favorite funds, Templeton Global Bonds, plays the world debt market like a currency fiddle. Managed by Dr. Michael Hasenstab and his PhD team, the fund seems to work hard all the time to keep shareowners on an even keel. Even in today’s difficult-to-navigate bond environment, the fund is slightly positive for the year so far, a good trick for bond managers. 

Michael Hasenstab’s official Franklin Templeton bio says that he “…specializes in global macroeconomic analysis with a focus on currency, interest rate and sovereign credit analysis of developed and emerging market countries.”  That pretty much nails it. Here’s a picture of the C-share for the decade ending in December 31, 2012, and the YTD through December 20, 2013, according to morningstar.com:

 

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Average

YTD

TEGBX

20.9

14.04

-3.46

13.05

10.5

5.84

18.36

12.3

-2.83

15.4

10.41

0.53

Note that in 2008, the fund was positive. Given that Barron’s opined that an equity fund that was negative was in the top 5% that year, that’s a doggone good trick—while it’s not fair to compare a bond fund with equity funds, there really were not many places to hide and some bond funds were negative. The FT team beat the Barclay’s aggregate that year, too. It often does, sometimes severely. 

In case you’re wondering, if we made the time period 15 years instead of ten, encompassing the March 2000 to March 2003 tech bubble, the  average would be 8.02% yearly. Want to compare the 15-year with SPY, the ETF that represents the S&P 500 at low cost (the Vanguard/Bogle way)?  SPY averaged 4.7% yearly.  

I hope that you have the brightest and merriest of holidays, filled with fun and good cheer, and, of course, a visit from Santa. 

For more from Richard Hoe, see:

Education getting squeezed

Unconventional, and the rise of flexible funds

Downside-Up