Franklin Templeton Investments has launched its Middle East and North Africa Fund, a Luxembourg-domiciled SICAV.  The new fund will be managed by Franklin Advisers, with Dubai-based asset manager Algebra Capital acting as sub-advisor.

The company will look to launch a tax-friendly, sterling-priced, distributor status share class for UK investors within the next few weeks. 

The Franklin MENA Fund seeks to achieve long-term capital appreciation by investing in a concentrated portfolio of 40 to 60 equity and fixed income stocks, as well as financial derivative instruments, across all sectors and market capitalisation ranges in the MENA region.  This includes, but is not limited to, Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, Oman, Egypt, Jordan and Morocco. 

Currently, exposure to the Saudi Arabian market is only available through Saudi Arabian-domiciled mutual funds.  Given the local restrictions on foreign investors, the fund will access the Saudi Arabian market by investing up to 10 per cent into one or more locally-registered equity funds.  The fund managers will also consider further exposure to the Saudi Arabian market through other locally-registered funds and Saudi Arabia-related financial instruments.

The fund will be managed by Stephen Dover, managing director and international chief investment officer for Franklin’s local asset management group. 

The management team will employ a bottom-up, research-intensive investment strategy with a macro overlay applied across all asset classes.  In particular, it will focus on fundamental research, conducting regular company visits to build its proprietary equity and debt models.