Disenchantment with managers who pick U.S. stocks predates the 2008 market decline. Actively run domestic-equity mutual funds are headed for a record five straight years of withdrawals, data from the Investment Company Institute show. In the 10 years through May 31, customers withdrew about $51 billion more from U.S. equity funds than they deposited as long- term returns stagnated.
Janus Capital Group Inc., based in Denver, has had eight straight quarters of net withdrawals totaling $21.6 billion. American Funds, the family run by Los Angeles-based Capital Group Cos., saw its $157 billion flagship Growth Fund of America lose $9.5 billion in redemptions this year through June, the most of any fund, according to Morningstar.
Hasenstab, 38, who has run the $61.5 billion Global Bond fund since January 2001, held no U.S. Treasuries and less than 1 percent of assets in euro-area sovereign bonds as of March 31, favoring countries with lower debt. He held no Japanese government bonds, opting for less-leveraged Asian economies.
The fund, up 6.1 percent this year through July 29, beat 99 percent of its world-bond peers over the past five years, according to Morningstar.
Relying on a prominent manager such as Hasenstab is one risk to Franklin because he could leave or step down, Jason Weyeneth, an analyst with Sterne, Agee & Leach Inc., said in an e-mail response to questions. Hasenstab oversees about $155 billion, or 21 percent of Franklin's assets.
"It's a good problem to have," said Weyeneth, who rates the stock "buy."