Franklin K2 Alternative Strategies Fund

Franklin Templeton Investment Funds

Summary of Fund Objective

The Fund’s investment goal is to seek capital appreciation with lower volatility relative to the broad equity markets. The Fund seeks to achieve its investment goal by allocating its assets across multiple alternative strategies.

  • A portfolio complement: An allocation to hedge strategies may provide an alternative source of returns while seeking to reduce risk.
  • Diversified alternative solution: The Fund provides one-stop access to a diversified selection of institutional hedge fund managers and strategies in a daily liquid vehicle.
  • A combination of disciplined capabilities: The investment process combines manager research with asset allocation analysis to construct a multi-manager, multi-strategy fund seeking to participate on the upside and reduce the downside.
  • Risk management: K2 Advisors, the investment manager, applies extensive risk processes, systems and data so that risks can be measured, monitored and managed.
  • Alternatives expertise: K2 has 20 years of hedge fund experience and a deep understanding of the hedge strategies they cover.


Brooks Ritchey

  • Connecticut, United States
  • Years With Firm: 14
  • Years Of Experience: 37

Robert Christian

  • Connecticut, United States
  • Years With Firm: 10
  • Years Of Experience: 30

Anthony M Zanolla

  • Connecticut, United States
  • Years With Firm: 6
  • Years Of Experience: 26

What are the Key Risks?

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 seeks to achieve its targeted investment objective by allocating its assets across multiple “alternative” strategies and by investing in a wide range of assets. Such assets and investment instruments have historically been subject to price movements due to such factors as general stock market volatility, sudden changes in interest rates, or fluctuations in commodity prices. The Fund will seek to limit volatility using hedged strategies. As a result, the performance of the Fund can fluctuate moderately over time.
  • Other significant risks include:
    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 an asset cannot be sold on a timely basis due to security-specific factors or adverse market conditions, which may impact the Fund’s ability to meet redemption requests, particularly if they are increasing.
    Multi-Manager risk: the risk that independent decisions of Investment Co-Managers may conflict with one another thus resulting in loss of efficiency.
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.