Fund manager Franklin Templeton is opening five new funds in South Korea later this month which will be registered in the country, accept won investments and hold overseas assets, country head Andrew Ashton told Reuters.
The new funds will form part of a suite of South Korea-domiciled international funds Templeton introduced last year, aimed at taking advantage of tax waivers the government is giving local companies that invest abroad.
The Templeton Global Equity, Templeton Global Bond and Franklin Templeton Japan Equity funds were launched last year and have among them about $1.8 billion under management.
The Japan fund has shown returns of 10.6% in the past six months, while Templeton's Global Equity Fund has returned 9.39% in the six months to May 14.
Franklin Templeton began the Franklin Global Real Estate Fund-of-Funds early in May along with a Templeton Global Balanced Fund. It now has plans for a China fund, an India fund, a "Chindia" fund that would invest in China and India, a European fund and one that would invest in South Korea, Japan and China.
Ashton, country manager for South Korea's Franklin Templeton Investment Trust Management Company, said these South Korea-registered funds were formed for two reasons.
"One is the government's initiative to externalize the assets in order to prevent the appreciation of the won," he said.
Second, it gave the South Korean Templeton team experience in managing global assets, he said.
These funds have a dollar-based net asset value (NAV) and investors could opt to have the currency risk hedged by the fund, he said.