To seek to maximise income and growth of capital (total return), including currency gains. The Fund mainly invests in government bonds issued anywhere in the world and denominated in, or hedged to, EUR. The Fund may invest significantly in Mainland China. Some of these investments may be below investment grade.

The Fund promotes environmental and social characteristics in accordance with Article 8 of the Sustainable Finance Disclosure Regulation (the “SFDR”).  

In its implementation of the Fund’s environmental, social and governance (“ESG”) considerations, the Investment Manager typically favors issuers with either higher proprietary ESG scores or those projected to have neutral to improving ESG scores over the medium term (the next two to three years), as captured by its proprietary ESG methodology. For supranational issuers, the Investment Manager utilizes ESG ratings provided by MSCI.

The Fund’s environmental or social characteristics are assessed both quantitatively and qualitatively, by means of sustainability indicators as well as of the Investment Manager’s proprietary ESG ratings system and its research process further described in the Website disclosure’s dedicated sections. As part of its investment decision making process, the Fund’s ESG strategy also uses binding criteria for the selection of underlying assets and applies specific ESG exclusions.  

Finally, the Fund has a minimum allocation of 50% of its portfolio to sustainable investments. The Fund ensures that its sustainable investments do not cause significant harm to any environmental or social sustainable investment objective.

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• Seeking to maximise total investment return consisting of a combination of interest income, capital appreciation and currency gains.
• Planning to hold their investment for the medium to long term.

The value of shares in the Fund and income received from it can go down as well as up and investors may not get back the full amount invested. Performance may also be affected by currency fluctuations. Currency fluctuations may affect the value of overseas investments.

• The Fund invests mainly in debt securities issued by government or government-related entities in any country and in derivatives. Such securities and derivatives have historically been subject to price movements, generally due to interest rates, foreign exchange rates or movements in the bond market. As a result, the performance of the Fund can fluctuate moderately over time.
• Other significant risks include:
  Counterparty risk: the risk of failure of financial institutions or agents (when serving as a counterparty to financial contracts) to perform their obligations, whether due to insolvency, bankruptcy or other causes.
  Credit risk: the risk of loss arising from default that may occur if an issuer fails to make principal or interest payments when due. This risk is higher if the Fund holds low-rated, sub-investment-grade securities.
  Foreign Currency risk: the risk of loss arising from exchange-rate fluctuations or due to exchange control regulations.
  Derivative Instruments risk: the risk of loss in an instrument where a small change in the value of the underlying investment may have a larger impact on the value of such instrument. Derivatives may involve additional liquidity, credit and counterparty risks.
  Liquidity risk: the risk that arises when adverse market conditions affect the ability to sell assets when necessary. Such risk may be triggered by (but not limited to) unexpected events such as environmental disasters or pandemics. Reduced liquidity may have a negative impact on the price of the assets.
  Emerging markets risk: the risk related to investing in countries that have less developed political, economic, legal and regulatory systems, and that may be impacted by political/economic instability, lack of liquidity or transparency, or safekeeping issues.

For full details of all of the risks applicable to this Fund, please refer to the “Risk Considerations” section of the Fund in the current prospectus of Franklin Templeton Investment Funds.