Skip to Content
Fund Spy

Will Templeton Global Bond Conquer China Next?

The world's biggest global bond fund takes its one-of-a-kind show to Asia.

Mentioned:

One mutual fund has emerged in recent years as investors' go-to choice for global-bond exposure. Since flows into world-bond funds turned positive in May 2009, Templeton Global Bond (TPINX) has taken in $41.3 billion in new money according to Morningstar's estimates, which represents nearly 60% of total flows into the world-bond category during this stretch. The $61.5 billion Templeton Global Bond now accounts for 40% of the total assets in the world-bond category.

Clearly the fund's popularity owes much to its outstanding record. In the past five years, it gained 11.6% per year on average, beating every other fund in the category and outlegging the Citigroup World Government Bond Index by an average of 360 basis points a year without producing additional volatility. Analytics such as the Sharpe Ratio give the edge to a handful of U.S.-dollar-hedged world-bond funds that don't take any currency risk, but this fund has otherwise produced an excellent risk/reward profile. Meanwhile, investors craving diversification have also enjoyed a very modest correlation to the Barclays U.S. Aggregate Bond Index in the past five years that's lower than all but one other fund in the category.

Many investors who've piled into this fund, however, may be surprised to learn just how offbeat it is. Even as it has nearly quadrupled in size during the past two years, its portfolio has shown no sign of shedding its idiosyncratic qualities. By betting on China's economy and shedding interest-rate risk, the fund could be taking its boldest stance yet.

Miriam Sjoblom does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.