TORONTO, Dec. 10, 2013 /CNW/ - Franklin Templeton Investments Corp.
today announced that, at all meetings held yesterday, investors in its
mutual funds (Participating Series) approved proposals to establish a
fixed rate administration fee and to change the management fee
currently charged to certain Participating Series. Upon implementation,
these changes will provide investors with greater fee transparency and
predictability, along with lower or, in some cases, the same management
expense ratios (MERs) as those previously reported.
"Our investors have validated the benefits of a fixed admin fee model
with their support of our proposal. This model will provide them with
more transparent and consistent fees so that they can understand the
ongoing costs of investing in our funds," said Dennis Tew, chief
financial officer of Franklin Templeton Investments Corp. "The new fee
structure will also result in lower MERs for the majority of our funds,
and the remaining funds will have the same MERs as those previously
Effective January 1, 2014, Franklin Templeton will pay the operating
expenses of each Participating Series other than certain fund costs,
such as directors' fees and expenses and new governmental fees, in
exchange for the payment by each Fund of an annual fixed rate
administration fee. Operating expenses payable by Franklin Templeton
include, but are not limited to, registrar and transfer agency costs,
audit fees, legal fees and custodial fees.
Previously, each Fund paid all of its own operating expenses, which
comprised a portion of the MER of the Fund. By fixing a large portion
of operating expenses at a set percentage, the certainty and
transparency of the MERs will significantly increase. The adoption of a
fixed rate administration fee also offers investors protection against
rising MERs triggered by declining markets, periods of net redemptions
or increased expenses and costs of services.
Certain fund costs, which will continue to be payable by each Fund,
include borrowing and interest costs, director's fees (as applicable),
investor meeting costs as permitted, the fees and expenses of the
Independent Review Committee of the Funds, and the cost of compliance
with any new or changed governmental and regulatory requirements
imposed on or after the December 10, 2013 implementation date. In
addition, each Fund will also pay all applicable taxes (HST, capital
taxes, income taxes and withholding taxes).
The fixed rate administration fee proposal also included a management
fee realignment, which is the other key component of a fund's MER. Most
of the management fee changes will decrease what is being charged to a
Participating Series. However, investors in Series A of Templeton
Growth Fund, Ltd. and Templeton Growth Corporate Class as well
investors in Series A, F, I and T of Franklin Bissett Canadian Balanced
Fund and Series A, F and T of Franklin Bissett Canadian Corporate Class
approved a proposal to increase the management fees charged to these
series. In all cases, for these series, the combination of the fixed
rate administration fee and management fee increase will result in a
MER that is either the same or lower than had previously been reported.
A quorum was not achieved for the meetings of the following Funds:
Franklin Income Hedged Corporate Class, Tapestry Balanced Income
Private Portfolio Corporate Class, Tapestry Diversified Income Private
Portfolio Corporate Class, Tapestry Global Balanced Private Portfolio
Corporate Class and Tapestry Global Growth Private Portfolio Corporate
Class. The meetings for these funds, as well as Franklin Bissett Small
Cap Corporate Class and Tapestry Growth Private Portfolio Corporate
Class, will be adjourned to December 16, 2013 at 9:30 a.m. (Eastern
Standard Time) at the offices of Franklin Templeton, at which meeting a
quorum will be any investor, in person or by proxy.
A complete list of the Funds that are subject to these changes, along
with additional information, is available at franklintempleton.ca.
About Franklin Templeton Investments
Franklin Templeton Investments Corp. is a wholly owned subsidiary of
Franklin Resources, Inc. (NYSE: BEN), a global investment management
organization operating as Franklin Templeton Investments. Franklin
Templeton Investments provides global and domestic investment
management solutions managed by its Franklin, Templeton, Franklin
Mutual Series, Franklin Bissett, Fiduciary Trust, Darby, Balanced
Equity Management and K2 investment teams. The San Mateo, CA-based
company has more than 65 years of investment experience and over US$870
billion (C$924 billion) in assets under management as of November 30,
Copyright © 2013. Franklin Templeton Investments Corp. All rights
SOURCE: Franklin Templeton Investments Corp.
For further information:
Amie Lauder, Corporate Communications, Franklin Templeton Investments, email@example.com, 416.957.6560