Franklin Templeton comprises multiple independent investment teams located around the world. As individual portfolio managers and teams pursue different fund mandates, there will always be different views held on the markets, and we consider that a strength. The insights below represent some of the current views of senior investment leaders at the various specialist investment managers.
2021 could produce the best economic growth in 20 years and may roll into an impressive 2022
Game-changing vaccines recalibrate a brighter future
Macro take: Post-pandemic boom?
Digital transformation is just getting started
A better year for dividend stocks
No single asset class is an unequivocal buy
Inflation is likely to remain subdued
Active alpha expected to trump slowing beta momentum
Back to the future
2021 likely to mark a new real estate market cycle
European valuations relatively attractive
Lingering uncertainty, regional opportunity
An exceptional investment window
Theme | Rationale | |
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THE FOURTH INDUSTRIAL REVOLUTION | Innovation is everywhere. The world is waking to the Fourth Industrial Revolution, a time of massive change inspired by disruptive innovation and pushed forward by a global pandemic. The accelerated adoption of technological solutions is just the beginning. Drivers of value creation exist across all industries from health care to consumer retail and manufacturing. While traditional valuations may appear high for growth leaders relative to companies not participating in such disruption, over the long run, they may be more likely to be deserving of such valuations as they look forward while others are standing in place. | ![]() |
A RETURN TO NORMAL | As vaccines get distributed more broadly, and businesses can begin to return to normal, a sustainable economic recovery appears to be at hand, with participation broadening and deepening. Cyclicals and value-oriented stocks may find that they are back in favor, as their valuations relative to high-flying growth companies are not likely to remain as widely separated. Continued fiscal stimulus is likely to help. Small caps may especially be the beneficiaries of economic recovery strength. | ![]() |
BARGAINS BEYOND BORDERS |
On a relative value basis, global equities are significantly less expensive than US equities on traditional measures such as trailing and forward looking price/earnings. While higher multiples in the US may be deserved given what has been a higher growth rate, the magnitude of the divergence may be unwarranted, especially as the world anticipates regaining its post-pandemic economic footing. Certain emerging markets may offer particular values while showcasing compelling economic growth. |
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THE SEARCH FOR YIELD FROM: |
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TRADITIONAL BONDS | Traditional investment grade and broadly diversified bond funds offer income and a counterbalance to equities, while historically offering yields superior to government bond funds. Now more than ever, with central banks keeping interest rates low and developed market government bonds offering paltry yields, these may be solid alternatives. | ![]() |
MUNICIPALS | Municipal bonds may also offer a high-quality alternative to government bonds. Given the pandemic’s impact on local and state governments, however, and the still uncertain relief from the federal government to help cover costs associated with the pandemic, active evaluation of municipal issues may be necessary to separate strong investments from strained investments. | |
BEYOND CASH | Lower volatility strategies in fixed income may help investors in managing overall portfolio fluctuations without going to cash. | |
ABROAD | Global bond funds may have the ability to seek higher-yielding bonds that still carry investment grade credit quality. Expanding the opportunity set to consider bonds outside the US may also be beneficial, as a potentially weakening US dollar and currency benefits are just one of multiple performance levers. | |
DIVERSIFIED INCOME SOURCES | Diversified, multi-sourced income funds can flexibly search out the best opportunities—even within a single company’s capital structure—for the best yield/risk scenarios as conditions warrant. Real estate traditionally has generated an income stream with returns that are not correlated with bonds or stocks. |
Franklin Templeton Investment Solutions | Franklin Templeton Emerging Markets | Western Asset |
Royce Investment Partners | ClearBridge Investments | Martin Currie |
Franklin Templeton Fixed Income | Franklin Mutual Series | Brandywine Global |
Templeton Global Equity | Franklin Equity Group | K2 Advisors |
Benefit Street Partners | Templeton Global Macro | Clarion Partners |
Brandywine Global Investment Management, LLC, Royce Investment Partners, ClearBridge Investments, LLC, Martin Currie Investment Management Limited, Clarion Partners, LLC, Western Asset Management Company, LLC and Legg Mason Investor Services, LLC, are subsidiaries of Franklin Resources, Inc. Legg Mason Investor Services, LLC, member FINRA, SIPC.
All investments involve risks, including the possible loss of principal. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in emerging markets 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. Non-diversified funds that concentrate in the biotechnology sector involve risks such as patent considerations, product liability, government regulations, and regulatory approval. Smaller, mid-sized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Investments in fast-growing industries like the technology sector could result in increased price fluctuation especially over the short term, due to the rapid pace of product change and development and changes in government regulation. Non-diversified funds concentrate in a single sector, which may entail higher risk. Alternative strategies may include risks in effectively allocating to subadvisors and currency, merger arbitrage and liquidity risks. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in a fund adjust to a rise in interest rates, the fund’s share price may decline. Risks typically associated with real estate include, but are not limited to local, state, national or international economic conditions; including market disruptions caused by regional concerns, political upheaval, sovereign debt crises and other factors. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. These and other risk considerations are discussed in each fund’s prospectus.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. The opinions and analyses are rendered as of publication date and may change without notice. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market.
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 professional, call us at (800) DIAL BEN®/342-5236 or visit franklintempleton.com. Please carefully read the prospectus before you invest or send money.