Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Hsein Lee - Morgan Stanley.
Hsein Lee – Morgan Stanley
You noted in your release that you recently launched a new SICAV fund, Franklin MENA. Could you give us an update on AUM in your SICAV products and also in this environment, as well as longer term, how you think these products will grow versus U.S. products.
Gregory E. Johnson
I don’t have the actual AUM at this point for the fund. It’s relatively small. We introduced it in the SICAV as well as to the Korean market and it’s really just an example with our local asset managers and that’s a minority ownership through Algebra Capital, that we’re seeing increased demand for more regional funds, more specialized focused alpha, and at this point it’s really early as far as assets. I’m sure it’s under $100 million.
Hsein Lee – Morgan Stanley
I would be interested if you could give some color on any differences you’re seeing in retail client engagement, by geography. Is demand in Europe and Asia currently weaker for you than the U.S. and also, once market conditions normalize, could you maybe help us bracket where you expect to see stronger investor demand and why?
Gregory E. Johnson
Well, I think it really follows investment performance and assets wherever you tend to be strong. If that sector is having trouble that will be difficult for flows. And I think if you look at the volatility for us of non-U.S. flows versus U.S. flows, certainly on the retail side, you do not have the benefit of municipal bond funds and the government funds and the funds that really add balance in these times. So you have more volatility, deeper redemptions on a net basis number for non-U.S. than you do for U.S.
But on the institutional side, the offset of that is that we still see big opportunities with global fixed, and the emerging markets debt, still in Sovereign Wealth funds and that could offset that. But that is about as general of a statement as I could make and I just think in this environment I would expect to see the U.S. flows more stable than the non-U.S. flows.
Hsein Lee – Morgan Stanley
Could you provide some additional color on what’s been driving the decline in performance this quarter at Franklin Templeton’s equity funds? Other than investment style, whether it’s sector or geographic exposures that have been driving down those numbers?
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