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Franklin Resources Profit Declines 44% on Record Redemptions

Franklin Resources Inc., the manager of the $58 billion Templeton Global Bond Fund, reported a 44 percent drop in fiscal fourth-quarter profit as the slump in emerging markets and energy eroded assets and prompted record investor redemptions.

Net income for the three months ended Sept. 30 declined to $358.2 million, or 59 cents a share, from $640.6 million, or $1.02, a year earlier, the San Mateo, California-based company said Thursday. Franklin shares rose as the company increased its share buyback and forecast lower expenses.

Franklin is cutting costs as clients pulled a net $28.6 billion during the quarter, the worst quarterly outflow ever for the firm. Franklin’s biggest funds bet on emerging market currencies and energy, both of which have tumbled in 2015 on concern about the strength of the global economy. Assets under management fell to $770.9 billion at the end of September, down 11 percent from the end of June.

“Their flagship funds have had performance issues and that has hurt sales and increased redemptions,” Michael Kim, an analyst with Sandler O’Neill & Partners in New York, said in a telephone interview...