STAY BULLISH ON INNOVATION

Franklin DynaTech Fund (FDYZK)

We believe there is no greater force for driving growth and creating value in the economy than innovation. In this video, Matt Moberg, SVP, Portfolio Manager, Franklin DynaTech Fund, discusses investment themes and current events related to the strategy.

Matt Moberg

“We strive to live at the intersection where new ideas can make great long-term investments.”

Matt Moberg
Portfolio Manager since 2004

Franklin DynaTech Fund is a diversified growth strategy which has focused on investing in innovation since 1968. The investment team researches, investigates, explores, studies and scrutinizes the greatest innovations of our time, 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.

Average Annual Total Returns, Advisor Class1

As of Quarter end 06/30/2021

Read important information about results and other investment disclosures.

1 YEAR RETURN

43.42%

5 YEAR RETURN

29.33%

10 YEAR RETURN

19.62%

Total annual operating expenses: With waiver: 0.61%, Without waiver: 0.62%.2

Performance data represents past performance, which does not guarantee future results. Current performance may differ from figures shown. The fund's investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please click here for the most recent month-end performance for this fund.

Overall Morningstar Rating3,4

As of 08/31/2021

As of August 31, 2021 the fund’s Advisor Class (FDYZK) shares received a 5 star overall Morningstar Rating™, measuring risk-adjusted returns against 1128, 1020 and 760 U.S.-domiciled Large Growth funds over the 3-, 5- and 10-year periods, respectively. A fund’s overall rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Franklin DynaTech Fund: Platforms of Growth

The Franklin DynaTech Fund investment team expects five platforms of growth to generate considerable economic value over the next five to ten years.

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Global E-Commerce

It’s easy to think that global e-commerce is late stage, but we believe there is much further to go. E-commerce is transforming commercial transactions through streamlined procurement systems, and fostering new online markets such as ride-sharing, home sharing, luxury apparel rental, apparel consignment, and leveraging internet influencers.

Genetic Breakthroughs

The gene was discovered in 1953,5 and it was first sequenced in 2003 at a cost of $100 Million.6 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.

New Finance

The level of innovation that is permeating the marketplace is affecting money itself. Currencies are now backed by algorithms, not just precious metals. Today we are increasingly using data to help price risk appropriately and allocate capital in more efficient ways. And how we pay for things is moving away from cash, checks and credit cards to mobile payments and digital wallets.

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.

Franklin DynaTech Fund may be an optimal way to harness the wealth-creation power of these innovations and others over a long-term investment horizon.

  1. Advisor Class shares are only offered to certain eligible investors as stated in the prospectus. The fund offers multiple share classes, which are subject to different fees and expenses that will affect their performance. Please see the prospectus for details.
  2. The fund has a fee waiver associated with any investment it makes in a Franklin Templeton money fund and/or other Franklin Templeton fund, contractually guaranteed through January 31, 2021. Fund investment results reflect the fee waiver; without this waiver, the results would have been lower.
  3. Source: Morningstar®. For each mutual fund and exchange traded fund with at least a 3-year history, Morningstar calculates a Morningstar Rating based on how a fund ranks on a Morningstar Risk-Adjusted Return measure against other funds in the same category. This measure takes into account variations in a fund's monthly performance, and does not take into account the effects of sales charges and loads, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The weights are: 100% 3-year rating for 36-59 months of total returns, 60% 5-year rating/40% 3-year rating for 60-119 months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent 3-year period actually has the greatest impact because it is included in all three rating periods. Morningstar Rating is for the named share class only; other classes may have different performance characteristics. Past performance is not an indicator or a guarantee of future performance.
  4. ©2021 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.
  5. 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
  6. 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