Franklin International Growth Fund Reports Mixed Returns

Despite sizable redemptions and steep losses in two months, the fund rebounded sharply in the third.

June 25, 2025

Franklin Global Trust’s International Growth Fund Sees Volatility but Ends Quarter with Gains

Franklin Global Trust just published its latest monthly report for the Franklin International Growth Fund, covering activity through April 30, 2025. The report offers a close look at how the fund performed over the past three months—and the picture is one of sharp movement in both directions. Losses in February and March gave way to a strong recovery in April, while investor flows continued to trend negative.

Fund Structure and Snapshot

As of the end of April, the fund held $833.8 million in net assets, with total assets just over $835 million. Liabilities remained minimal at $1.3 million. There was no borrowing, no preferred stock outstanding, and no payables tied to delayed settlement or standby commitments. Liquidity stayed solid, with more than $1.4 million in cash and equivalents on hand.

Returns Moved in Both Directions

All five share classes showed the same pattern: losses in the first two months of the period, then a strong bounce. March was the low point—returns dropped more than 5.5% across classes. February saw smaller declines of around 1.5%. Then came April. Most classes gained more than 5.4%, recovering much of the prior losses.

These swings were visible in the fund’s gains and losses:

February and March realized gains reached into the millions but were outweighed by deeper unrealized losses of $22.6 million and $55 million, respectively.

April saw a $1.2 million realized loss but a $43.5 million unrealized gain.

Notably, the fund didn’t use derivatives during the period. It reported zero activity—no swaps, futures, options, or foreign exchange contracts—reinforcing a fully long equity strategy with no hedging in play.

Global Allocation and Currency Exposure

The fund’s largest holdings give a sense of its geographic tilt. The top allocations included:

Experian plc(Jersey): $34.8 million

CTS Eventim AG(Germany): $31.9 million

Sika AG(Switzerland): $29.5 million

Amadeus IT Group SA(Spain): $27.5 million

Nice Ltd.(Israel): $24.2 million

Currency exposure was broad. Positions were denominated in euros, British pounds, Swiss francs, and yen. But the fund did not hedge those exposures—again, no currency derivatives were in use.

Investor Flows and Redemption Pressure

Across all three months, the fund experienced net outflows. In March alone, redemptions totaled $22.1 million, while new purchases brought in $11.3 million. April and February followed similar patterns. Redemptions consistently outpaced new sales.

Even with these outflows, the fund did not breach any liquidity thresholds. No violations of highly liquid investment minimums were reported, and no days were spent over SEC-defined derivatives exposure limits. The fund continued to meet redemptions without dipping into illiquid assets or leveraging.

Risk Reporting and Regulatory Metrics

The fund did not report credit spread risk metrics, likely because debt instruments did not account for more than 25% of assets. It also did not provide VaR data, suggesting it falls outside SEC VaR testing rules or qualifies for exemptions.

There was no reported use of margin, collateralized derivatives, or securities lending. No counterparty exposure. No backtesting exceptions. The structure remains straightforward, focused on equity positions with no embedded leverage.

Equity Strategy Focus: Top Holdings by Weight

Several positions stood out based on size relative to net assets:

Intermediate Capital Group plc(UK): $30.7 million

Scout24 SE(Germany): $26.2 million

Interroll Holding AG(Switzerland): $23.8 million

VAT Group AG(Switzerland): $18 million

RS Group plc(UK): $21 million

Each of these holdings exceeded 2% of NAV, highlighting the fund’s preference for high-conviction investments in international developed markets.

What This Means Going Forward

This update shows a fund that experienced a volatile quarter but came out of it with a strong April. While redemptions were persistent, the fund maintained liquidity, stayed out of derivatives, and stuck to its global equity mandate.

Whether April’s recovery extends will depend on market conditions ahead. But for now, the fund remains fully invested and structurally sound—with flexibility to respond to shifts in equity markets worldwide.