Global Investment Interest on the Rise Worldwide

From Franklin Resources, Inc.
contact Becky Radosevich
Telephone (212) 632-3207

More than half of U.S. and global respondents plan to invest outside their domestic markets over the next decade, according to Franklin Templeton Global Investor Sentiment Survey 

San Mateo, Calif., March 29, 2011 – Enthusiasm for global markets is growing. The Franklin Templeton Global Investor Sentiment Survey found that half of respondents plan to invest outside their home country in 2011. Those intentions increase over the long term, with 62 percent of all respondents planning to invest in global markets over the next 10 years.  

The global survey polled 13,076 people in 12 countries and revealed that while just 34 percent of respondents currently have investments outside of their own country’s market, only 33 percent believe their own country’s market will perform better compared with the rest of the world in 2011—illustrating a willingness to consider opportunities in the global marketplace. 

“With an improved global economic outlook, investors are increasingly looking worldwide for investment opportunities. A diversified portfolio today is no longer just a mix of asset classes, but also a mix of geographies,” said Greg Johnson, president and chief executive officer of Franklin Templeton Investments. “As people, businesses and economies around the world become increasingly connected, we can expect to see a rise in trade and consumption and the expansion of stock markets over the next decade and beyond. Savvy investors are watching these trends and making investment decisions based on the growth potential they see globally.” 

U.S. vs. the World

Of the 1,049 U.S. survey respondents, 62 percent indicated that they believe the U.S. stock market will advance in 2011, but only 27 percent believe it will perform better than stock markets across the world. 

Survey findings revealed a gap between beliefs and actions regarding the global investment opportunity. When considering equities in particular, nearly three-quarters (73 percent) of U.S. respondents stated that the best opportunities will lie not only in the U.S. over the next 10 years. However, the survey showed that just 40 percent of Americans currently have investments outside the U.S. market, with results revealing only a 7 percentage point increase among those who intend to invest outside the U.S. in the coming year (47 percent). When looking out over the next decade, 53 percent of U.S. respondents plan to invest outside the U.S. market. 

Perception vs. Reality

The survey found that the hangover from the global recession continues to impact investor perceptions. Half (49 percent) of American respondents believe the U.S. stock market was either down or flat in 2010 when, in fact, the S&P 500 Index recorded a gain of 15.06 percent in 2010.1   

When comparing market performance versus the rest of the world, only 21 percent of Americans believe the U.S. stock market had better performance in 2010. While emerging markets (as represented by the MSCI Emerging Markets Index) did record a 19.20 percent gain, S&P 500 Index performance of 15.06 percent exceeded the 9.43 percent gain for rest of the world (as represented by MSCI World ex USA Index) last year.1 

“The market decline of 2008 and early 2009 is continuing to influence perceptions of recent stock market performance. The survey tells us, however, that respondents recognize the importance of equity investing going forward. About three in five U.S. respondents (59 percent) don’t think they will be able to meet their long-term investment goals without investing in stocks,” said David McSpadden, senior vice president of Global Advisory Services for Franklin Templeton Investments. “We believe that if investors focus on the longer-term opportunity provided by equities, the case is very compelling, and looking globally for those investments is a key to building a diversified portfolio.”     

Emerging vs. Developed Markets

The survey highlighted stark regional differences in opinion on whether the best investment opportunities exist in emerging vs. developed markets over the next 10 years.  

A majority of those in Asia (86 percent) and Latin America (61 percent) believe the best investment opportunities over the next 10 years will be found in emerging markets. Europeans are almost evenly split with 53 percent favoring emerging markets, while in North America (the U.S. and Canada), only 37 percent believe emerging markets will provide the best returns in the decade ahead. 

Methodology

The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, an Infogroup company, included responses from 13,076 individuals in 12 countries: Brazil, Chile and Mexico in Latin America; Hong Kong, India, South Korea and Singapore in Asia; Germany, Italy and the UK in Europe, and the U.S. and Canada in North America. Survey respondents were between the ages of 18 and 64 in all countries, except in the UK and U.S. where survey respondents were 18 years of age and older. Surveys were completed from January 6 to 17 in all countries except the U.S. where surveys were completed from January 6 to 7. Data were weighted to make the results representative in each country. 

Investing in Equities

As part of its program, 2020 Vision: The Case for Equities in the Decade Ahead, Franklin Templeton has developed an educational guide, Global – The New Core, designed to help advisors and their clients understand how global investments may increasingly serve as a core component within portfolio allocations. 

Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN/(800) 342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money. 

Investments in foreign securities involve special risks including currency fluctuations, economic instability and political developments. Investments in emerging market countries involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size, lesser liquidity and lack of established legal, political, business and social frameworks to support securities markets. Such investments could experience significant price volatility in any given year. 

About Franklin Templeton

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over $693 billion in assets under management as of February 28, 2011. For more information, please visit franklintempleton.com. 

# # #


1. Source: © 2011 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. All figures assume reinvestment of dividends and/or capital gains at net asset value. Indexes are unmanaged and one cannot invest directly in an index.  Past performance does not guarantee future results.