Franklin Templeton

The asset manager was stuck at $700 billion in AUM for 18 months. Faced with a grim reality, Franklin made the obvious move: It got bigger in a hurry.

The nearly $4.5 billion deal is another case of consolidation in the industry, as firms grapple with falling fees and the rising challenge from managers of index-tracking funds.

Once a top-performing fund with assets well over double today’s value, Templeton’s flagship bond fund has been diminished by the march of passive investments.

The expansion is intended to free advisors to spend more time on client-facing tasks, executives say.

The $10.1 billion fund’s star manager, well known for his contrarian investments, held on to a short position against U.S. Treasurys even as bonds rallied.

The industry is embracing new technology, big data and alternative investment strategies as clients demand more from funds.

If approved, the actively managed product will hold anywhere from 60 to 100 equities across sectors and will have no position holding over 5%.

Managers will actively evaluate an asset’s characteristics — its value or momentum, for example — to determine what to buy.

The firm plans to focus on raising money for products that lock up capital for several years, according to people with knowledge of the matter.

Nearly all posted losses over the last year.