It looks like Franklin Resources is dipping its toes into the Israeli fund market. Globes, an Israeli online news service, reports that the San Mateo California-based fund firm has partnered with Ilanot Discount to launch a mutual fund in the Middle Eastern nation.

The move comes as the Israeli has recommended the separation of bank mutual fund and provident fund products. In response, Israeli banks are reportedly seeking foreign parters.

The initial joint effort between Franklin Templeton and Ilanot Discount will be the Ilanot Templeton Global fund. More funds are expected to be launched by the two firms down the road.

Templeton Investments will act as the subadvisor to the new fund and will manage it in the same style as the Templeton Global Fund in the United States.

"Franklin Templeton wants to break into the Israeli market," Shaul Zadka, Ilanot Discount general manager, told the news service. "The new funds will enable investors to exploit investment advantages outside Israel following the tax equalization, scheduled to come into effect at the beginning of January 2005. Franklin Templeton sees opportunities in the start of pension funds' activities in liquid markets,"  

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