Investing in Innovation
Elevate your experiences
Franklin DynaTech
Franklin DynaTech is a diversified growth strategy which has focused on investing in innovation since 1968. The investment team researches, investigates, explores, studies and scrutinizes what the manager believes are leaders in innovation, looking for the best potential investments. They seek to identify those companies and industries with compelling products, new processes, strong management and disruptive technologies. At the heart of their process is a belief that innovation drives wealth creation, innovation is pervasive and accelerating, and investing in innovation requires active management.
"We strive to live at the intersection where new ideas can make great long-term investments."
Matt Moberg
Portfolio Manager since 2004
Developing Innovation Platforms1
The Franklin DynaTech investment team expects five platforms of growth to generate considerable economic value over the next five to ten years.
Disruptive Commerce
It may be easy to think that global e-commerce is late stage, but we believe there is so much further to go. E-commerce is transforming commercial transactions through streamlined procurement systems, as well as bringing rise to new online markets such as ride sharing, home sharing, luxury apparel rental, apparel consignment, and leveraging internet influencers.
Genomic Advancements
The gene was discovered in 1953,2 and it was first sequenced in 2003 at a cost of $100 Million.3 The decreasing cost of genome sequencing is leading to an explosion in new technologies that are designed to extend and enhance the quality of human life, including diagnostics, gene muting, breakthrough therapy, gene editing, health and wellness, and the agricultural use of genetics to improve food taste and quality.
Intelligent Machines
The last 30 years were spent organizing data with mainframes, personal computers, and mobile phones and we believe the next 30 years could repurpose that data to change our lives. Improvements in data, algorithms, and networking have led to new designs with more individualized products, specific to our own needs. Potential investments include autonomous driving, sensor and connector producers, semiconductors that drive artificial intelligence, software that helps in product design, factory automation, and network enablers.
Energy Transformation
Transforming our energy sources from fossil fuels will be one of the largest capital expenditures in history. It will require increased production from multiple sources including solar, wind, hydrogen, nuclear, water, geothermal and new forms of energy. In addition to production innovation, the increased complexity of the grid will lead to more investment in the distribution of energy for commercial and residential users alike. Energy consumption patterns are also likely to change, with a focus on energy efficiency, electrification, and flexibility. Taken together, these shifts represent a turning point that should lead to materially higher implementation of new innovations in the energy space.
Exponential Data
Data, data, data. It is the underlying factor in almost all of our platforms. Without data, none of these platforms would be successful. But data isn’t virtual, it needs to be collected, stored and delivered. That means there need to be overhauls in the amounts and structures of data centers, fiber-optic cable, towers and other supporting infrastructure. Artificial Intelligence, computer power and memory are crucial to the next stage of actually using the data. The creation, cleaning, storage, and delivery of data will lead to new applications like augmented and virtual reality, artificial intelligence machine learning, software as a service, and the sharing economy.
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- This content reflects the analysis and opinions of investment team and may differ from the opinions of other portfolio managers, investment teams or platforms at Franklin Templeton. Because market and economic conditions are subject to rapid change, the analysis and opinions provided may change without notice. The commentary does not provide a complete analysis of every material fact regarding any country, market, industry or security. An assessment of a particular country, market, security, investment or strategy is not intended as an investment recommendation nor does it constitute investment advice. Statements of fact are from sources considered reliable, but no representation or warranty is made as to their completeness or accuracy.
- Heather JM, Chain B. The sequence of sequencers: The history of sequencing DNA. Genomics. 2016;107(1):1–8. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4727787/#!po=1.35135
- National Human Genome Research Institute. (2019, October 30). DNA Sequencing Costs: Data. Genome.gov. https://www.genome.gov/about-genomics/fact-sheets/DNA-Sequencing-Costs-Data
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