Presidential Election Complicates US Market Outlook
The global market outlook is already hazy in light of the COVID-19 pandemic, and the upcoming US presidential election adds another layer of uncertainty.
A Turning Point for Emerging Market Debt
With inefficiency comes opportunity, according to Franklin Templeton Fixed Income’s Nicholas Hardingham and Robert Nelson. They consider the emerging market debt landscape, and what the remainder of the year could bring for the asset class.
Emerging Markets Rally as Economies Reopen in the Second Quarter
The COVID-19 pandemic continues to impact economies across the globe as they emerge from lockdowns, including emerging markets.
K2 Advisors Third Quarter Hedge-Fund Strategy Outlook
Pricing dislocations and adjustments between companies, industries, regions and asset classes due to the impact of COVID-19 offer opportunities for select hedged strategies, according to K2 Advisors.
Responsible Investing in a Traditional Asset Class
In the municipal bond market, the issuance of green bonds has provided an attractive solution for investors interested in socially responsible investments while also receiving the tax-exempt income benefit municipal bonds offer. Franklin Templeton’s Municipal Bond team provides an overview of green bonds, including potential benefits and risk considerations.
State Budgets Hit a Bumpy COVID-19 Road—Analyzing Municipal Credit Pressures
For most US governors, June typically brings political fireworks when state legislatures hammer out final budgets for the next fiscal year.
“Build Back Better”: COVID-19 Brings the “S” From ESG Into Focus
Dislocations resulting from the pandemic shine a light on environmental, social and governance (ESG) issues, which can be used as an additional tool to identify leading companies from the laggards, according to Franklin Templeton’s Global Head of ESG, Julie Moret.
Fed Starts Buying Individual Corporate Bonds: An ETF Update
The US Federal Reserve (Fed) recently announced it would purchase individual corporate credit bonds. David Mann, our Head of Capital Markets, Global ETFs, makes a case for using smaller ETFs to accomplish that goal.
Disease and Debt Now: Dispersion Later?
Deficits are rising across the developed world as governments aggressively loosen their purse strings in response to the COVID-19 pandemic. But what are the ramifications of all this debt?
The New Emerging Market Landscape: The Single Commodity Focus Has Shifted
As emerging markets cope with the COVID-19 epidemic, Franklin Templeton’s Emerging Markets Equity team considers three new realities they see in the emerging markets today. This second post in a three-part series examines how emerging markets have diversified their economies.
Competing Priorities Impact Retirement Preparedness
Franklin Templeton’s 2020 US Retirement Income Strategies and Expectations survey revealed the importance of having a plan to help reduce financial-related stress—particularly relevant amid today’s uncertainties. Our Felix Touchard discusses some findings of the survey, and how respondents feel about their financial future.
Biotechnology Innovation During COVID-19
Innovation has always been a key driver for the biotechnology industry. Even in the midst of the COVID-19 pandemic, there is still significant progress in the discovery and development of innovative drugs.
Value vs. Growth? Yes, Both
Our Head of Equities, Stephen Dover, gives his take on why value and growth investing are not different strategies.
If You Open It, They Will Come
After the shock of COVID-19, when will the global economy return to a sense of normalcy? Franklin Templeton Fixed Income CIO Sonal Desai examines some key economic activity indicators in the wake of the pandemic. She shares data on recent changes in US consumer behavior which seem to signal people are eager to go back to normal life.
EU Delivers Comprehensive Fiscal Rescue Package
The European Commission has unveiled a sweeping new €750 billion coronavirus fiscal rescue package, including the issuance of new bonds. David Zahn, our Head of European Fixed Income, calls it groundbreaking.
Fed Support Helps Stabilize MBS Market
Like most asset classes, mortgage-backed securities (MBS) have seen heightened volatility over the past two months as the world copes with COVID-19 and investors look to reduce risk. The MBS market managed to stabilize amid help from the US Federal Reserve, which purchased these and other securities in a broad support program.
What’s Next for Markets as Lockdowns Lift: A Multi-Asset View
With markets starting to make a comeback, our Multi-Asset Solutions CIO Ed Perks looks ahead to second half of the year, including the implications of the US economy opening up, the ongoing impact of the massive monetary and fiscal response, and the risk for a wave of downgrades and defaults.
European Fixed Income: Coming Out of Crisis
As European economies slowly start to come out of coronavirus lockdowns, it could be some time before growth returns to pre-crisis levels, according to David Zahn, our Head of European Fixed Income. He says the crisis has been another test for the European Union...
A New Globalization Emerges (copy)
Our Head of Equities Stephen Dover gives his take on the new globalization, how the US Midwest may be the next emerging market, and what he thinks it means for strategic industries and supply chains.
A New Globalization Emerges
Our Head of Equities Stephen Dover gives his take on the new globalization, how the US Midwest may be the next emerging market, and what he thinks it means for strategic industries and supply chains.
Getting Back to Normal
The COVID-19 pandemic has changed how global consumers learn, shop, travel and work, as well as how they fulfill entertainment and health care needs. Franklin Equity Group’s John Remmert and Donald Huber share which trends they think are permanent and which are likely just a phase.
Now Let’s Get Those Jobs Back
COVID-19 has taken a toll on human lives as well as the global economy, with the latest US employment figures revealing a shocking number of job losses in April.
Coronavirus Pandemic Shifts Focus to ESG
The coronavirus pandemic has highlighted the importance of financial market risks that fit within the realm of environmental, social and governance (ESG) factors—namely disaster preparedness and health risks.
Building Credit-Ability: Additional Clarity on Fed ETF Buying
While there still isn’t complete clarity surrounding the Federal Reserve’s purchases of exchange-traded funds (ETFs), it did recently release a bit more information. David Mann, our Head of Capital Markets, Global ETFs, attempts to solve the mystery of which ETFs the Fed might be buying—and when.
Dividend Growth: A Hallmark of Quality More than Ever
Some market observers have speculated many companies could cut dividends as the COVID-19 pandemic continues to unfold. However, that doesn’t mean there aren’t still opportunities for yield-seeking investors, says Franklin Equity Group’s Nick Getaz and Matt Quinlan.
How to Think about Truing up Asset Allocations in Times of Market Stress
Some investors use a set-it-and-forget-it approach to their portfolios, but there are times when the asset mix may need to be recalibrated to achieve one’s goals.
Don’t Forget About Your Other Retirement Plan
As headlines revolve around the impact of the coronavirus and the costs of government spending packages to keep the economy afloat, the state of Social Security is one thing we can find at least some assurance in, says Gail Buckner, our personal retirement and financial planning strategist.
Municipal Bond Perspective: Where We Go from Here
As the COVID-19 pandemic evolved during the first quarter, the municipal bond market experienced one of its most volatile periods in years. Here, the Franklin Municipal Bond Department shares how they plan to navigate the market, which they think is likely to show signs of distress and elevated volatility for some time.
Fixed Income View: A Crisis Like No Other
When times of turmoil hit, most investors become risk-averse, seeking safety over opportunity for higher returns. The coronavirus-driven crisis is no different in that regard. However, John Beck, our director of fixed income, London, sees some striking differences between this and other crises, and offers some thoughts on where he thinks taking some risk today might make sense.
Promising COVID-19 Research Underway
Our Head of Equities Stephen Dover explains why he sees many signs of hope for a global recovery from the COVID-19 pandemic. He also shares highlights from a conversation between Templeton Global Equity Group CEO Dr. Sandy Nairn and Professor Gerry Graham, a world expert in immunology.
The Fed and Fixed Income ETFs: The ETF Issuer Spread Widens Further
As the ravages of the coronavirus reverberated through the global economy in March and into April, the Federal Reserve announced a number of measures to help provide relief to financial markets—one being the purchase of exchange-traded funds (ETFs).
K2 Advisors: Second Quarter Hedge Fund Strategy Outlook
The coronavirus pandemic has created a number of pricing dislocations within markets across the globe. In its second-quarter outlook, the K2 Advisors team takes a look at how hedge fund managers are navigating the current market environment and which strategies are finding opportunities from these dislocations.
The First (and Worst!) Quarter is Over: 9 Steps to Take Now
In the first quarter of 2020, stock markets across the globe experienced one of the worst quarters in the history of global financial markets. But maybe it’s time for investors to take a pause and do some strategic thinking...
Quick Thoughts: Focus on Consumers
Our Head of Equities Stephen Dover gives his take on what the continued business shutdown due to the COVID-19 pandemic could mean for US workers, particularly those who are not currently earning a paycheck. He also shares why oil prices could remain subdued for a bit longer, and why he thinks tech companies could come to the rescue of small business.
Taking a Long-Term View on Innovation
Franklin Equity Group’s Matt Moberg suggests looking beyond near-term market concerns and focusing on five technology-enabled themes that are likely to disrupt traditional business practices over the next decade.
Bringing the Economy Back from Life Support
With recent data showing a coronavirus-driven recession in the United States appears inevitable, the question for many investors is how long it will last. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, weighs in on the differences between this one and other recessionary periods—and whether policymakers can engineer a recovery.
Which ETFs Will the Fed Buy?
The US Federal Reserve announced it would buy exchange-traded funds (ETFs) as part of a range of measures to help support the markets in the wake of the coronavirus. David Mann, Head of Capital Markets, Global ETFs, examines which ETFs it might actually buy, and when.
US Equities: Taking the Long View Through Today's Uncertainties
While the US economy continues to suffer the wrath of the coronavirus, a recovery will eventually come. Franklin Equity Group's Grant Bowers provides his latest update on the US equity market, and what he and his team have an eye on with a long-term investment view.
Living on “COVID” Time
The coronavirus has forced a number of behavior changes throughout societies across the globe, including how we work, shop and interact with others. Our Head of Equities Stephen Dover discusses how COVID-19 has impacted investor decisions, too.
Navigating Emerging Markets During Uncertain Times: This Too Shall Pass
Even though economic activity in many countries has dramatically slowed or stopped due to the coronavirus outbreak, Franklin Templeton Emerging Markets Equity’s Andrew Ness still thinks there’s underlying long-term potential in emerging markets. He shares the specifics of what he’s on the lookout for as an investor in this highly uncertain period, which eventually will pass.
The Road to Premiums is Paved with Good Intentions: Perspective on the Fed and ETFs
The US Federal Reserve recently announced a number of measures to support the economy and markets amid the coronavirus crisis. One involves the purchase of fixed income exchange-traded funds (ETFs). David Mann, Head of Capital Markets, Global ETFs, shares his thoughts on the subject, and what he thinks is the best way to support the corporate bond market through these purchases
Biotech Progress in Addressing Coronavirus, but It Takes Time
With the coronavirus creating havoc across the globe, researchers are rushing to find better treatment options and a cure. Our Head of Equities, Stephen Dover, and Portfolio Manager Evan McCulloch outline a few of the efforts the medical and scientific communities are taking to combat the virus.
Times of Turmoil and Trouble Keeping ETF Score
During these turbulent times, how does one track and value the performance of an exchange-traded fund? David Mann, Head of Capital Markets, Global Exchange-Traded Funds, opines on ways to “keep score.”
More Heavy Lifting from the Fed—While Congress Squabbles
The US Federal Reserve continues to use whatever tools it can to help combat economic fallout from the coronavirus. Sonal Desai, Chief Investment Officer, Franklin Templeton Fixed Income, calls its latest response “a whole new level” of stimulus.
US Equity Market Update on Recent Volatility: Three Reasons for Optimism
The impact of the coronavirus on the US economy still isn’t fully known yet, as the situation continues to evolve. However, Franklin Equity Group’s Grant Bowers sees at least three reasons to be optimistic about the long-term recovery.
The “New Normal” for ETF Trading?
Thoughts on the “new normal” in ETF trading during these turbulent times from our Head of Capital Markets, Global Exchange-Traded Funds.
Navigating the Muni Market in Today’s Environment
As coronavirus-related market volatility expands into municipal bonds, the Franklin Municipal Bond Department explains how they are navigating an increasingly challenging muni-market environment. They also share reasons why they believe a longstanding preference for high-quality municipal bonds supports their efforts to turn volatility into opportunity.
The Fed Speaks Loudly and Carries a Big Stick
The US Federal Reserve took dramatic action on Sunday, March 15, slashing interest rates and relaunching quantitative easing and other measures to battle the economic impacts of the coronavirus.
The Oil Price Plunge and Impact on Emerging Markets
Falling oil prices can be a double-edged sword in terms of economic impact: welcomed by consumers, but not by producers. Franklin Templeton Emerging Markets Equity’s Bassel Khatoun shares his thoughts on the impact of lower oil prices on emerging market economies and some considerations for investors
ETF Trading and Volatility: It’s All Relative
When markets turn volatile, some question the role of exchange-traded funds (ETFs) in exacerbating market moves. David Mann, our Head of Capital Markets, Global ETFs, offers some perspective.
UK Budget Ease Follows Coordinated BOE Rate Cut
Newly appointed UK Chancellor of the Exchequer Rishi Sunak tore up the fiscal rulebook and unveiled a spend-heavy UK budget, announced just after the Bank of England delivered an emergency interest-rate cut.
US High Yield Faces Double Whammy
Financial markets across the globe have been dealt a one-two punch—the spread of the coronavirus and an oil price war that caused prices to plummet. Glenn Voyles, Matt Fey and Bryant Dieffenbacher of Franklin Templeton Fixed Income examine the impact on high-yield credit.
Emerging Markets Hit by Spread of Coronavirus in February
Our Emerging Markets Equity team examines the impact of the spread of coronavirus across emerging market economies during the month of February.
What’s Driving Oil Market Volatility?
Franklin Equity Group’s Fred Fromm explains why recent oil market demand and supply shocks are essentially unprecedented and are leading to oil prices that are uneconomical for almost all market participants.
Viewing Volatility Versus Uncertainty Through an ETF Lens
Investors certainly have had to face both volatility and uncertainty these past few weeks given coronavirus concerns and other geopolitical risks. David Mann, our Head of Capital Markets, Global Exchange-Traded Funds (ETFs), talks about the difference between the two through the lens of ETF trading.
What’s Next for European Monetary Policy?
As European Central Bank (ECB) policymakers adjust the budget to reflect lighter eurozone economic activity, moderate economic growth and the United Kingdom’s departure from the European Union (EU), David Zahn, our Head of European Fixed Income, shares his macroeconomic outlook for the region. He weighs in on why the ECB could remain accommodative.
ESG Study: How Institutional Investors Embrace Responsible Investing
Responsible investing has gathered enough momentum in recent years to reach the mainstream. What is less clear is how far along global institutional investors are in the process of integrating environmental, social and governance (ESG) principles into their investment decisions.
The Fed Responds
The US Federal Reserve surprised markets on Tuesday with an interest-rate cut, but will it restore investor confidence? Franklin Templeton Fixed Income CIO Sonal Desai shares her initial reaction.
Why the MENA Region Can Survive US/China Trade Disputes
There are tangible signs economies in the MENA region have reformed and evolved over the past decade, according to Franklin Templeton Global Sukuk and MENA Fixed Income’s Dino Kronfol, and Franklin Templeton Emerging Markets Equity’s Bassel Khatoun and Salah Shamma. They outline the opportunities they see in the year ahead.
Coping with Coronavirus-Induced Market Volatility: A Multi-Asset Update
The spread of the coronavirus has created heightened market volatility in recent weeks, but the Franklin Templeton Multi-Asset Solutions team remains focused on long-term market fundamentals. Here, Ed Perks and Gene Podkaminer offer an update on how they are approaching the situation, and which countries appear more insulated to growth shocks.
Getting Comfortable with ETF Liquidity
Many people put a lot of thought into the purchase of an asset—whether it’s a car, an investment vehicle or even a more mundane item—but might not think as much about what happens when they don’t want it anymore.
Full Economic Implications of Coronavirus Largely Unknown
As markets continue to assess the impact of coronavirus (COVID-19), the Templeton Global Macro team shares an update on the economic and market implications, which they say could be more detrimental—and last longer—than many observers previously thought.
Five Reasons to Consider Investing in Small-Cap Value Stocks
Many investors overlook lesser-known smaller companies in favor of well-known behemoths, but there are some mighty values in small-capitalization (cap) stocks, according to Franklin Small Cap Value Fund Portfolio Manager Steve Ranieri. He outlines five things for investors to consider.
Implications of the Coronavirus for Natural Resource Investors
The coronavirus and the impact of containment efforts on global economic growth and oil demand is influencing investor sentiment and behavior, according to Franklin Equity Group’s Fred Fromm. Despite the outbreak’s near-term impact on commodity prices and natural resources stocks, he explains why he thinks the situation is likely to be manageable for most companies in the long run.
A Multi-Asset Approach to Assessing Risk and Opportunity in Emerging Markets
While there are a number of uncertainties in the global economy today, many investors may not realize the depth and breadth of potential opportunities emerging markets still offer—on both the equity and fixed income side.
Fears Over Virus Outbreak Curb Investor Optimism in January
Our emerging markets equity team looks at news and events shaping emerging market performances in January, from coronavirus fears to trade to Middle East tensions.
K2 Advisors: First Quarter Hedge-Fund Strategy Outlook
Pricing dislocations in Europe, performance dispersion across the credit spectrum and shifts in the political landscape should likely provide abundant opportunities for select hedge strategies in the year ahead, according to K2 Advisors. The team shares some macro themes and questions its focused on, and shares its outlook for various hedge strategies.
Closing the European Performance Gap
Although European equities performed well in 2019, there’s still a significant value and performance gap compared to US stocks, according to Franklin Mutual Series Portfolio Manager Katrina Dudley. Here, she gives reasons why she’s optimistic about the backdrop for European value stocks and discusses some potential market-moving events she’s monitoring.
Multi-Asset Implications of the Coronavirus Outbreak
The coronavirus outbreak that started in China could certainly be considered an unexpected market shock, one which looks to remain a concern for a while longer.
The UK Has Left the EU. What’s Next Post-Brexit?
It’s been 3-1/2 years since the United Kingdom voted to leave the European Union, and the process known as Brexit has been far from smooth. Now that the deadline to leave has passed, what’s next for the United Kingdom, and for Europe?
A Value Investor View of Market Dynamics and Potential Dislocations
Equities saw strong 2019 performances across the globe, so the big question for investors is whether the bullish momentum can continue. Templeton Global Equity Group’s Alan Bartlett and Tony Docal provide a look at what drove the positive performances around the globe in late 2019, and how they are poised to take advantage of any potential dislocations in the year ahead.
Municipal Bond Perspective: Approach High Yield with Caution in 2020
As we head into 2020, municipal bonds will likely remain attractive for many tax-sensitive investors, but their performance potential could prove to be relatively muted compared to 2019, according to Sheila Amoroso, director of our Municipal Bond Department.
Monitoring China’s Outbreak, and Other Potential Market Shocks
The Templeton Global Macro team takes a look at the implications of the coronavirus in China, and positioning for potential market shocks.
Oops! They QE’d Again
The US Federal Reserve (Fed) has gone back to expanding its balance sheet. Some claim that quantitative easing (QE) is back; the Fed denies it. What we call it isn’t the point, says Sonal Desai, Franklin Templeton Fixed Income CIO—what matters are the implications of this “permanently loose” policy stance for asset prices, investment strategy and market volatility.
Allocation Views: Taking a Nimble Approach to 2020
Although easing US-China trade tensions have renewed investor optimism about global economic growth, Franklin Templeton Multi-Asset Solutions’ Ed Perks and Gene Podkaminer still see some potential geopolitical headwinds on the horizon.
Emerging Markets End 2019 on a High Note
Emerging markets ended 2019 on a high note, but can the momentum continue? Our emerging markets equity team weighs in, highlighting the market news and events it has an eye on.
Taking a Long-Term View on Oil
Franklin Equity Group’s Fred Fromm gives his take on global oil markets amid elevated tensions between the United States and Iran.
On My Mind: Will the US Economy Survive the Politics in 2020?
The many gloomy predictions for 2019 did not come to pass, but can we be more optimistic for 2020? Franklin Templeton Fixed Income CIO Sonal Desai draws the key lessons from last year and outlines what we should expect for the year ahead and her main concerns, with political uncertainty top of the list.
Active ETFs, Small ETFs and Other Trends to Watch in 2020
As we kick off the new year, market prognosticators are busy making their 2020 predictions. David Mann, our Head of Capital Markets, Global Exchange-Traded Funds (ETFs), offers some thoughts on trends and milestones within the ETF industry he thinks could come to fruition in 2020.
Why Digital Transformation Should Remain Resilient in 2020
Franklin Equity Group’s Jonathan Curtis explains why he thinks businesses will need to invest significantly more in digital technology in the coming years to better understand and service their customers and to reduce costs.
SECURE Act Passage Heightens Retirement Security
A sweeping piece of legislation affecting how individuals save and invest for their retirement, known as the “SECURE Act,” has recently been signed into law. Our investment professionals talk about the implications of the Act, and how it can enhance the retirement security of millions of Americans. And, they outline some changes in the legislation that also affect college savings plans.
Global Investment Outlook: Coping with a Changing Market Landscape in 2020
Our senior investment leaders have a cautiously optimistic outlook for 2020. They still do not see a global recession looming and believe there are plenty of reasons to remain invested.
Outlook for Municipal Bond Investing
Municipal bonds can continue to provide a number of potential benefits for tax-sensitive investors as we move into 2020, according to Shelia Amoroso, director of Franklin Templeton Fixed Income Group’s Municipal Bond Department. However, following the strong results in 2019, she and the team expect total return potential to be muted in 2020, with likely increased volatility.
2020 Outlook for Emerging Markets Equity Investing
While US-China trade issues still haven’t been resolved, there are reasons to be optimistic about the prospects for emerging markets in the coming year.
Allocation Views: 2020 Appears Tilted to the Downside
While US-China trade tensions and other concerns prompt a cautionary stance when it comes to risk assets, Franklin Templeton Multi-Asset Solutions’ Ed Perks and Gene Podkaminer nonetheless remain positive about the US equity market in the year ahead, citing a number of long-term growth drivers that still remain in place.
A Fixed Income View of 2020: Separating Sentiment from Fact
Investors could be in for a bumpy year ahead, according to Franklin Templeton Fixed Income CIO Sonal Desai. She emphasizes the importance of separating the facts from the headlines, but also thinks it’s a good time to look to “de-risk” portfolios to some extent, while still remaining invested.
UK Election: Will Tory Victory Bring Investors Back to UK Equities?
As widely expected, the Conservative Party emerged victorious in the UK general election. Our Colin Morton anticipates UK equity markets will welcome the outcome, but cautions that some uncertainties remain.
Assessing Potential US Health Care Reforms Ahead of an Election Year
Health care reforms are always a popular topic of discussion ahead of a US presidential election campaign, where politicians talk about proposed changes that can be very different than the current system.
Emerging Markets Record Diverse Performances in November
It was a mixed month for emerging markets in November, as shifting expectations about a trade deal between China and the United States continued to drive market sentiment. Our emerging markets equity team explains why US-China trade issues may not be that big of a concern for some emerging markets, and provides an overview of the news and events shaping markets during the month.
What’s Ahead for the MENA Region?
As investors ponder the prospects for the Middle East and North Africa (MENA) region, Franklin Templeton Emerging Markets Equity’s Bassel Khatoun and Salah Shamma take stock of the investment landscape. They highlight some of the market developments in Saudi Arabia, Kuwait, Egypt and the United Arab Emirates (UAE) that have caught their attention.
Corporate Governance in Emerging Markets: Progress and Opportunity
There have been improvements in corporate governance in a number of emerging markets, but it remains a work in progress.
Two Reasons US Equities May Keep Climbing into 2020
There’s an old adage called “climbing a wall of worry” that’s used to describe a situation where markets continue to climb in the face of uncertainties. Certainly there is no shortage of uncertainties today, yet US stocks have clawed their way to new all-time highs. Franklin Equity Group Portfolio Manager Grant Bowers recognizes there may be a few cracks emerging, but says there are still two main reasons to be optimistic about the outlook, and believes there is still room for US equities to run in 2020.
Non-Transparent, Active ETFs Get Regulatory Nod
The menu of types and styles of exchange-traded funds available to investors keeps growing. The Securities and Exchange Commission just approved four proposals for a new type of exchange traded fund: non-transparent, active ETFs
Corporate Governance in Emerging Markets: Harnessing Winds of Change
Emerging markets provide many potential investment opportunities, but corporate governance shortfalls can present challenges. Over the years, some countries have moved faster than others to plug their governance gaps. Franklin Templeton Emerging Markets Equity’s Chetan Sehgal and Andrew Ness outline what corporate governance is and how emerging markets are making improvements in this area.
Optimism Returns to Emerging Markets in October
A number of factors spurred improved investor sentiment in emerging markets over the past month, including an interest-rate cut from the US Federal Reserve. Franklin Templeton Emerging Markets Equity outlines the news and events shaping market moves during October, and the reasons why the team is optimistic about the coming year.
Navigating New Global Market Uncertainties
Global equity markets continued to face uncertainties during the third quarter of this year, but by and large, they remained resilient.
Emerging Markets Show a Quiet Resilience
As the world watches the US-China trade spat roll on, it is important to look beyond the headlines and examine the economic reality and progress within emerging markets, according to Franklin Templeton Emerging Markets Equity’s Andrew Ness. He explains why investors should pay attention to the economic evolution taking place in emerging-market economies.
Beyond Alignment: Contributing to the Sustainable Development Goals
As investors, both institutional and individual, look for ways to use their money in a more impactful way, the United Nations’ Sustainable Development Goals (SDGs) have emerged as a relatable tool. However, Raymond Jacobs and John Levy from Franklin Real Asset Advisors warn the SDGs are vulnerable to misuse, misrepresentation and dilution.
In the Know: Finding Value Among US Microcap Stocks
When many investors think of microcap stocks, they envision high growth stocks that are like rockets. They soar when times are good, and crash and burn when times are bad.
Data science has brought investors powerful new tools to help generate returns, so is there still need for a human touch? Franklin Templeton Fixed Income CIO Sonal Desai weighs in on the role of quantitative science within the active-passive investment debate.
Templeton Global Macro: An Update on our ESG Scores
This update contains a brief background on our ESG philosophy as well as an update on our methodology, notably including an improvement we made to adjust from overweighting S and G factors in previous iterations to an equal weighting of each of the E, S and G factors going forward.
Three Tenets for Investing in Innovation
With global economic growth experiencing a slowdown this year, some investors may be concerned about valuations for the innovative companies that have been popular during the past decade.
Brexit: Not the Beginning of the End, But the End of the Beginning?
Against the odds, Boris Johnson’s UK government appears to have agreed to a deal in principle with the European Union (EU) which could see the United Kingdom leave the EU on October 31 in an orderly way.
Monetary Easing Prevalent in Emerging Markets in the Third Quarter
The US-China trade conflict has remained at the forefront of investor concerns in recent months, with both governments imposing tariffs on each other’s goods. While continued tensions are likely to result in continued market volatility, Franklin Templeton Emerging Markets Equity nonetheless finds reasons to be positive about emerging markets, with a more dovish global central bank backdrop offering support.
India’s Surprise Tax Cut Comes at An Opportune Time
Amid slowing economic growth in India, the Modi government’s surprise corporate tax cuts have come at an opportune time, according to Franklin Templeton Emerging Markets Equity’s Sukumar Rajah. He explains why the fiscal adjustment could improve India’s competitiveness among its regional peers.
Staying Nimble Amid an Uncertain Outlook
Bouts of volatility hit markets across the globe in the third quarter of 2019 amid continued uncertainties about global growth and trade. Central banks took notice, with the US Federal Reserve easing interest rates for the first time in more than a decade and the European Central Bank also cutting rates and reintroducing quantitative easing.
Looking Past the Hang-Ups for Asia’s Smartphone Industry
Despite the US-China trade war, Franklin Templeton Emerging Markets Equity’s Sukumar Rajah doesn’t think the opportunity set for emerging markets is lost. He explains how a saturated smartphone market could create innovation opportunities in emerging market countries in Asia.
Real Assets Could Be the Alternative
Given the backdrop of a slowing global economy and shaky investor sentiment tied to trade tensions, Franklin Templeton Multi-Asset Solutions’ Ed Perks and Gene Podkaminer are calling for an active investment approach.
The Fed Calls Time for a Reality Check
The US Federal Reserve cut its benchmark short-term interest rate for the second time this year, but some observers were disappointed the Fed didn’t more strongly signal future easing moves.
August Ruled by Global Economic Slowdown and Trade Fears
Trade fears, social unrest in Hong Kong and Brexit uncertainties weighed on markets in August. Franklin Templeton Emerging Markets Equity expects continued volatility, but an interest-rate cut from the US central bank in September could help stabilize emerging market currencies.
Pinpointing Fixed Income Credit Risks
In this excerpt from the latest Franklin Templeton Thinks, Franklin Templeton Fixed Income Group examines how machine learning techniques can measure the risks of consumer and home loans—helping pinpoint credit risks they think are worth taking.
What We Think Could Drive European Markets in the Coming Months
As European investors and market practitioners return from their summer vacations and prepare for the final third of 2019, our Head of European Fixed Income David Zahn highlights the issues he thinks will drive markets in the coming months.
Changes to the Emerging Markets Club: China (A Shares), Argentina and Saudi Arabia
There have been some noteworthy recent changes in the composition of two broad emerging market indexes that have investors taking notice.
Three Reasons to Consider Dividend Growers
As global economic growth slows and US-China trade tensions drag on, Franklin Equity Group’s Nick Getaz and Matt Quinlan see signs that some investors may be turning their attention away from the high-growth stocks that have been popular during the recent US equity bull market.
US Market Volatility and Sleepless Summertime Nights
The summer of 2019 has given equity investors a lot of things to worry about. Yet, Franklin Equity Group’s Grant Bowers says the health of the US equity bull market shouldn’t be one of them—at least not now.
Yield Curve Hysteria
The inversion of the Treasury yield curve has recently gotten a lot of attention in the financial press as being a harbinger of economic malaise ahead. Our Fixed Income CIO Sonal Desai says these conclusions are misguided.
Adrift: Has Monetary Policy Become Unanchored?
In light of the Federal Reserve’s recent interest-rate cut, our Fixed Income CIO Sonal Desai takes a look at how US central bank thinking seems to have changed, and whether there’s a risk of having interest rates too close to zero.
Trade Tensions Flare: Where Do We Go from Here?
Market volatility has been on the rise as US-China trade tensions continue to flare and recent central bank activity has created more questions than answers. As such, many investors have been on edge.
Impact Investing in Practice: Social Infrastructure
To understand how impact management can be applied in practice, our Franklin Real Asset Advisors team, in collaboration with consulting firm Tideline, took an example from the real estate sector and considered the specific demands of social infrastructure.
The Federal Reserve: Dealer’s Choice
The US Federal Reserve cut its benchmark short-term interest rate for the first time in 11 years in what Chairman Jerome Powell called a “mid-cycle adjustment” to sustain the US economic expansion.
The Five Building Blocks of Effective Impact Management
No single, unified best practice has yet emerged for impact investing, and a proliferation of methodologies and metrics has introduced an element of confusion. Simply navigating through all the resources available to impact investors can be a challenge.
A Northern View: 10 Years into a Canadian Bull Market
While there has been a lot of focus among many investors on the length of the US economic expansion, there are other countries experiencing similarly long—or longer—expansions of their own.
Four Reasons Why Gold Prices Have Been Moving Higher
Investor sentiment toward gold turned bullish in June, pushing gold spot prices to six-year highs in US dollar terms in July. As a result, there is excitement in the industry that, if prices hold, third-quarter corporate earnings results for gold miners may indicate a return to strong cash generation.
An Introduction to Impact Investing
Interest in impact investing is growing within the asset management industry, but there is still some confusion about it. We view impact investing’s defining feature as the explicit intention to generate positive, measurable social and environmental outcomes alongside a financial return.
New UK Prime Minister Boris Johnson Faces Challenges at Home and Abroad
Boris Johnson, one of the most enthusiastic supporters of Brexit, is the United Kingdom’s new prime minister. David Zahn, Franklin Templeton’s Head of European Fixed Income, doubts Johnson will have much of a honeymoon period in the new role as he faces stiff challenges domestically and internationally, with global markets scouring his every move.
Food Security Through an ESG Lens
Consumers in emerging markets are demanding more meat. But with virulent animal diseases threatening some traditional sources of their meat proteins, they are having to look beyond their domestic and regional markets to sate the demand.
Brazil Takes Big Reform Step
Pension funding has been an issue in many parts of the world and has certainly been a hot topic in Brazil. President Jair Bolsonaro’s election ignited market optimism on promises to reform pensions to get Brazil’s fiscal house on a firmer footing. The probability of this being delivered has increased considerably after approval of a new pension reform bill in Brazil’s lower Congress. Franklin Templeton Emerging Markets Equity’s Gustavo Stenzel and Marcos Mundim weigh in on what the breakthrough means for the country, and for investors.
As the US economic cycle continues to age, many are starting to question when, and how, it will end. Our Head of Equities Stephen Dover says it's certainly wise for investors to prepare, but doesn't see reason to think a recession is on the immediate horizon.
As the US economic cycle continues to age, many are starting to question when—and how—it will end. Our Head of Equities Stephen Dover says it’s certainly wise for investors to prepare, but doesn’t see reason to think a recession is on the immediate horizon.
Health Care Sector Innovation: How Biopharma Scientists Save Lives Globally
In today’s world of disruptive innovations, biotechnology is entering the most transformative phase our health care analysts have seen in 25 years. Since mapping out the human genome in 2003, drugs using new treatment paradigms—like gene and cellular therapies—have jumped out of laboratories and into the marketplace to tackle humanity’s most vexing diseases.
Where Bricks Are Beating Clicks: Implications for Last-Mile Real Estate
Many observe the impacts of e-commerce growth as decimating commercial retail properties, leaving empty big-box warehouses and strip malls in its wake. While this may be true to a certain extent, it ignores the potential opportunity this new trend is creating in the industrial property sector.
A Strong June Pulled Emerging Markets Up in the Second Quarter
Trade issues continued to dominate headlines in June, with easing in US-China trade tensions providing a boost to emerging markets overall during the month. But Franklin Templeton Emerging Markets Equity cautions trade-related headwinds could persist. The team shares its latest emerging-market outlook and explains why the small-cap space looks attractive right now.
Where Bricks Are Beating Clicks: Implications for Last-Mile Real Estate
Many observe the impacts of e-commerce growth as decimating commercial retail properties, leaving empty big-box warehouses and strip malls in its wake. While this may be true to a certain extent, it ignores the potential opportunity this new trend is creating in the industrial property sector.
Understanding the Climate Change Challenges Facing Consumer Goods Companies
As an active investment manager with a firm commitment to integrating environmental, social and governance analysis into its investment processes, Franklin Templeton recognizes its responsibility to raise awareness of climate transition issues.
MENA Fixed Income: Four Things That Are Top of Mind
Accelerated demand for regional debt suggests a constructive remainder of 2019 for bonds in the Gulf Cooperation Council (GCC), according to Dino Kronfol, chief investment officer, Franklin Templeton Global Sukuk and MENA Fixed Income. He outlines four things that are at the top of his mind for GCC debt in the current economic climate. He also shares why he thinks the MENA region could provide fertile ground for fixed income investors searching for yield.
An Investor’s Perspective on the Proposed Taxonomy for Sustainable Finance
Can stakeholders (regulators, policymakers and market participants) deliver a sustainable finance framework that serves the end-client well?
What's Really Driving Oil Market Volatility?
Franklin Equity Group's Fred Fromm explains the global oil supply-demand dynamics responsible for the bouts of oil market volatility we've seen this year.
US Fed in Tough Spot as Market Clamors for Rate Cuts
The US Federal Reserve kept interest rates steady at its June meeting; it emphasized its data-driven approach to policy decisions but noted it believes the case for lower interest rates to be strengthening.
China's Sci-Tech Board: Hope or Hype?
China will be launching a Nasdaq-style stock market for technology and research-driven companies to list and raise capital. While it has some detractors, Franklin Templeton Emerging Markets Equity believes this upcoming board is of strategic importance to China.
Trade War Concerns Rattle Emerging Markets in May
Trade tensions caused investors to back away from emerging markets in May, but there are many reasons to be optimistic about the asset class and the earnings outlook ahead.
The “Halo Effect” of Saudi Arabia’s Emerging Markets Arrival
Saudi Arabia’s inclusion in the MSCI Emerging Market Index marks a significant milestone for the MENA region.
Should Markets Heed Recession Warnings?
Amid a renewed US-China trade spat and additional tariff tensions between the United States and Mexico, investor concerns about a possible recession have heightened.
Trade War: The Second Front
After ratcheting up trade tensions with China, the Trump administration has threatened tariffs on Mexico over illegal US border crossings.
The EU: Singing from 28 Hymn Sheets
What’s the investment lesson in Europe’s recent parliamentary elections? Our Fixed Income CIO Sonal Desai says it’s differentiation. Read more of what’s on her mind about this topic.
Municipal Bonds: When Full Faith and Credit Falls Flat
Once upon a time, US municipal bonds were generally considered less risky than corporate bonds. Backed by the full faith and credit of state governments, investors had confidence they would receive their principal plus interest without fail. Times have changed.
FOMO? Investors Fear Missing Out as Companies Stay Private for Longer
Many companies are staying private for longer before deciding to go public—if they do so at all. But what does that mean for investors?
European Parliamentary Elections: A Barometer of European Thinking?
European parliamentary elections don’t typically generate international headlines, but with Brexit still unsettled, this time they are front and center.
May Confirms Departure Date, but What Could It Mean for Investors?
UK Prime Minister Theresa May has finally confirmed the date she intends to resign, after enduring growing criticism from members of her own party. According to David Zahn, our Head of European Fixed Income, this development significantly increases the chances of the United Kingdom crashing out of the European Union (EU) without a deal. He expects a likely negative market response, but argues there may be opportunities for shrewd active managers.
May Confirms Departure Date, but What Could It Mean for Investors?
UK Prime Minister Theresa May has finally confirmed the date she intends to resign as UK Prime Minister, after enduring growing criticism from members of her own party.
Financial Wellness: Are College Costs Impacting Your Retirement?
Recent statistics on student loan debt have found some rather alarming trends. Not only are many parents prioritizing the financing of college for their children over their own retirement, but some are still paying off their own student debt—even into their 60s.
US/China Trade Tensions Are Testing Investors’ Nerves
The war of words between the Trump administration and China threatens to break out into a full-scale trade war.
Fundamentals Drive Emerging Market Performances in April
Franklin Templeton’s Emerging Markets Equity team walks through events moving emerging markets in April and discusses the three things the team is thinking about today. The team believes the current market environment provides an attractive entry point for investors, particularly in the small-cap stock space.
Many Americans Unprepared for the Cost of Health Care in Retirement
The rising cost of health care has been a political hot button issue for years, and Franklin Templeton’s 2019 “Retirement Income Strategies and Expectations (RISE)” survey revealed it remains a top concern today.
Searching for Value When Growth Is King
It’s been a tough road for value investors during the past decade or so, even leading some pundits to declare the investing style is dead.
European Elections: Big Changes, or Business as Usual?
Many observers are predicting that European elections later this month will usher a wave of populist representatives into the European Parliament.
Eurozone Debt Disputes Make an Unhappy Union
Once upon a time, bonds backed by a government’s full faith and credit pledge were generally considered less risky than corporate bonds. Times have changed. In today’s political climate, not all governments inspire us with the same confidence.
Is Your Portfolio Prepared for a Potential Wildfire?
In the decade since the global financial crisis, many investors have either actively steered—or ended up with—a large portion of their portfolios in investments tied to economic growth, namely stocks.
The Answer Is Blowing in Brazil's Wind
Renewable energy production in Latin America has grown dramatically over the last decade. The use of green technology like wind turbines and solar arrays continues to expand, as countries like Brazil seek to improve energy security and lower carbon emissions.
Don’t Let Home Country Bias Limit Your Investment Potential
It’s easy for investors to fall into what is known as “home country bias,” looking only within their own country’s borders for opportunities. Investors may be missing the boat if they don’t expand their opportunity set beyond their shores.
Changing Dynamics and New Opportunities in Municipal Bonds
Many investors flock to municipal bonds because of potential tax advantages. While this year’s taxes are probably already done and dusted, Franklin Templeton’s municipal bond team felt it was an appropriate time to revisit the opportunities and risks that recent US tax reform poses for the space.
Still No Roadmap to a Brexit Resolution as EU Offers Another Extension
Brexit may have been delayed again. The European Union has offered to allow the United Kingdom more time to decide how it wants to leave. While the measure may prevent a no-deal Brexit in the short term, our Head of European Fixed Income David Zahn thinks it may simply be saving up problems for the future.
A Long Brexit Delay Seems Likely, but to What End?
Brexit negotiations are once again going to the wire. With no resolution in place and the clock ticking down, Sandy Nairn, chairman of Templeton Global Equity Group and CEO of Edinburgh Partners, looks at the possible outcomes.
Trade Wars—The Dog That Didn’t Bark
The prospect of a “trade war” between the United States and China has caused some investor trepidation over the past year. But are the fears of economic fallout from this “war” warranted? And, was there ever really a war at all?
China’s Re-Balancing Act
In the face of slowing economic growth, the Chinese authorities appear ready to act. Franklin Templeton Emerging Markets Equity’s Sukumar Rajah and Jason Zhu explain how measures announced at the 13th National People’s Congress are designed to shore up China’s growth prospects.
Is the US Yield Curve Signaling a US Recession?
There has been a lot of talk the past few years about the flattening of the US yield curve—which is a graphical representation of the spread between short- and long-term interest-rate instruments. More recently, some market commentators have focused on the inversion of one part of the curve—and what it means.
Steady Fed Maintains Dovish Stance
The US Federal Reserve’s decision to keep interest rates steady at its March meeting came as little surprise, but its updated “dot plot” projections were interpreted by markets as sending a decidedly more dovish signal than expected.
Can the EU’s Extension Offer Really Break the Brexit Deadlock?
After a nail-biting few hours, European Union leaders have agreed to the UK government’s request to delay Brexit, albeit the extension is less than Theresa May had requested. But our Head of European Fixed Income David Zahn believes the decision does little more than reset the clock and he warns there is still a strong chance that the United Kingdom could still crash out without a deal.
On My Mind: Modern Magical Thinking
In economic (and political) circles, “Modern Monetary Theory” has gotten some buzz of late. What does it mean—and does it have any merit? Franklin Templeton Fixed Income Chief Investment Officer Sonal Desai thinks it’s not only potentially dangerous, but offers intellectual fuel for populism.
MPs Say No to No Deal, but an Accidental Hard Brexit Remains a Possibility
Some commentators have described March 13 as the most important day in the Brexit saga since the June 2016 referendum. UK members of parliament have voted to reject a situation in which the United Kingdom crashes out of the European Union without a deal.
This Isn’t the Way Stock Market Cycles Typically End
European equities are the great unloved asset class. But Dylan Ball, head of European Equity Strategies, Templeton Global Equity Group, thinks that status means there should be some opportunities to be found for long-term investors.
Emerging Markets Record Mixed Performances in February
Emerging market equities saw mixed performances in February, with stocks in Asia faring better than stocks in Latin America and emerging Europe, which underperformed.
Shifting Climate, Shifting Opportunities
Climate change, like any type of disruption, has disparate impacts on people, places and things. It can also have disparate impacts on corporations and investments.
Volatile Markets: Are High-Frequency Traders to Blame?
Our Head of Equities, Stephen Dover, takes a look at what’s driving growth in high-frequency trading. He also explains why the algorithms behind the trading can lead to bouts of increased market volatility that may create opportunities for long-term investors.
Three Technology Titans Reshaping Retail
Powerful retailing disruptors are reshaping expectations about shopping and shipping by digitizing retail markets across the globe. New conveniences such as ordering groceries with a simple voice command are upending the old-world order.
Emerging Markets Race Ahead in January
Emerging market equities were off to a strong start overall in 2019, rebounding from a 2018 downturn.
On My Mind: The Fed Will Hike Again—Because It Can
While the financial markets seem to be betting on a very extended pause in the US Federal Reserve’s multiyear tightening cycle, Franklin Templeton Fixed Income Group Chief Investment Officer Sonal Desai has another idea. Here, she makes the case that interest-rate hikes may still be on the table this year.
A Measured but Constructive Market View
The market environment for value investors over the past few years has been less than ideal, but that doesn’t mean there aren’t opportunities to be had.
The Real Risk in Today's Global Markets
While some observers might worry that the current global economic cycle is ending, Templeton Global Macro CIO Michael Hasenstab characterizes the slowing growth we are experiencing as a cyclical slowdown, not the end of the cycle. He is more concerned with the political vulnerabilities he's seeing in the global economy today, and says the world's increasing fragmentation due to populist policies is a major concern.
Three Reasons to Embrace Emerging Market Corporate Credit
Robert Nelson, a portfolio manager with Franklin Templeton Fixed Income Group, believes emerging market corporate debt presents a compelling but under-appreciated investment story. Here he sets out three reasons why investors might consider an allocation to the asset class.
Reinventing Cars—Risks and Rewards on the Transportation Highway
New mobility technologies are reshaping how cars are powered, driven and used for years to come.
Surveying the Investment World through an ESG Lens: A Snapshot of Key Topics from the US
Environmental, social and governance (ESG) topics have never been more prominent in investors’ minds than they are today. But there’s considerable variation among investment managers about how ESG is considered or integrated.
The Impact of US Policy on Emerging Markets: Three Investor Misconceptions
As investors continue to grapple with market jitters brought on by months of US-China trade tensions and other market uncertainties, Franklin Templeton Emerging Markets Equity’s Chetan Sehgal explains why the recent volatility could present opportunities in the medium to long term.
US Government Shutdown Paused for Now: Assessing the Economic Impact
The longest-ever US government shutdown has finally ended—at least temporarily—while negotiations continue over funding of a US-Mexico border wall. While the government will be reopened at least until February 15, the economic implications of the shutdown and the potential for more disruption ahead has become a source of concern to many global investors.
US Government Shutdown: Assessing the Impact
The longest-ever US government shutdown has finally ended, at least temporarily, while negotiations continue over funding of a US-Mexico border wall. While the government will be reopened at least until February 15, the economic implications of the shutdown and the potential for more disruption ahead has become a source of concern to many global investors.
What Really Stood Out at the 2019 US Consumer Electronics Show
When we attend the US Consumer Electronics Show (CES) each year in Las Vegas, our goal is to avoid the marketing hype surrounding certain products. Instead, we look for the latest technologies we think are really going to make a difference, some of which may not generate media buzz.
Putting Equity-Market Turbulence into Context
Many equity investors were no doubt happy to put 2018 in the rear-view mirror. The heightened volatility in the fourth quarter of the year in particular took many investors by surprise—but what is often missing in the discussions about the volatility is that it didn’t stem from a broad deterioration in economic fundamentals.
Why We Think Most “Brexit Panaceas” Are Ill-Thought-Through or Unviable
As expected, Theresa May and her government survived the no-confidence vote called by the opposition Labour Party after the UK Parliament overwhelmingly rejected her withdrawal deal. Now UK political attention must turn back to the real job at hand—navigating the United Kingdom’s exit from the European Union.
Emerging Markets Outpace Developed Markets in the Final Quarter of 2018
Numerous uncertainties weighed on investor sentiment in 2018 and led to a down year for emerging markets overall, although the fourth quarter saw some outperformance versus developed markets.
Mapping the Influence of AI and Machine Learning
The evolution of artificial intelligence (AI) has rarely been far from the headlines in recent years. Its influence now reaches into nearly every sector and geography and holds economic and political ramifications that many experts say are on par with the start of the Industrial Revolution in the 18th Century.
Emerging Markets Equity Investing: Never Waste a Crisis
Emerging-market equity investors are likely happy to bid goodbye to 2018—a year filled with challenges and uncertainties.
Is it Time for Small-Cap Stocks Overseas to Shine?
As global markets increasingly ponder how long US economic growth can continue, Franklin Equity Group’s Ed Lugo says he’s looking for potential investment opportunities outside the United States. He explains why he sees opportunities in Europe and Asia, despite concerns about Brexit negotiations and a slowing Chinese economy.
What Will a Government Shutdown Mean for Investors?
US members of Congress are finding themselves at a stand-off over the creation of a border wall between the United States and Mexico. President Trump’s threats to shut down the government if the bill is not passed raise questions and uncertainty that will contribute to increased political risks for investors to consider. Stephen Dover, Head of Equities for Franklin Templeton Investments, shares his perspective about the potential impacts.
The Impact of US Policy on Emerging Markets—Dollar Concerns “Overdone”
Continued US dollar strength has focused attention on weaker commodity prices and dented investor enthusiasm for emerging markets in recent months—stoking fears that the current climate could lead to a repeat of the 1997-1998 Asian Financial Crisis.
Risk On, Risk Off, or Risk Uncertain?
While big market swings can be unsettling to many investors, there are a number of alternative investment strategies that aim to turn volatility into opportunity, according to K2 Advisors’ Brooks Ritchey and Robert Christian.
Does a Brexit Resolution Require a New Referendum or a General Election?
Political infighting abounds in the United Kingdom as the clock ticks relentlessly towards the March 29 Brexit date. Amid entrenched positions on all sides, Sandy Nairn, Chairman of Templeton Global Equity Group and CEO of Edinburgh Partners, argues that only a fresh referendum or a general election can break the Brexit deadlock and examines some of the implications for investors.
Distortion, Divergence and Diversification: 2019 Global Investment Outlook
Our senior investment leaders see plenty of reasons to be optimistic about the year ahead, but recognize investment opportunities may be more divergent.
Changes in Technology, Regulation and Accessibility Drive Rise in Use of Collective Investment Trust
Collective Investment Trusts (CITs) have been gaining momentum in the retirement space, and for good reason. Jason Colarossi, vice president, national retirement strategist, of Franklin Templeton’s Defined Contribution Division, outlines what CITs are and how they have evolved.
The Case for Municipal Bonds in a Rising-Rate Environment
Municipal bond yields moved higher in 2018 and seem likely to continue moving up in 2019 if market expectations for further interest-rate increases play out.
An Integrated Approach to Managing ESG Risks and Opportunities
Information, data and research are the fuel for investment decisions. Over the years, as new information has emerged and evolved, investors have found innovative means to harness new insights to help inform their decisions.
Are We Nearly There Yet?: Revisiting the Politics and Processes of Brexit
In the summer, Sandy Nairn, Chairman of Templeton Global Equity Group and CEO of Edinburgh Partners, authored a paper entitled The Politics and Processes of Brexit.
Why Some Investors Are Looking Again at Gold
For some investors, increasing exposure to gold has been a knee-jerk reaction to bouts of heightened financial market volatility. Franklin Equity Group's Steve Land says there's more to gold than that. And he explains why he's positive about both the prospects for gold and for gold equities.
The Glistening Project: Why Some Investors Are Looking Again at Gold
For some investors, increasing exposure to gold has been a knee-jerk reaction to bouts of heightened financial market volatility. Franklin Equity Group’s Steve Land says there’s more to gold than that. And he explains why he’s positive about both the prospects for gold and for gold equities.
The Gift that Keeps on Giving
The holiday season is approaching, and with it, the busiest time of the year for shoppers as they search for the perfect gifts for their loved ones. But instead of purchasing the latest toy or electronic gadget for your children or grandchildren, what about giving them the gift of a more secure future?
October Market Recap and Outlook: A Sea of Opportunities
Emerging markets continued to struggle in October amid an environment of heightened equity-market volatility globally. Manraj Sekhon, CIO of Franklin Templeton Emerging Markets Equity, and Chetan Sehgal, senior managing director and director of portfolio management, believe the pullback presents long-term investors with opportunities amid what they dub an overreaction. They present the team’s overview of the emerging-markets universe in October.
Theresa May’s Brexit Steeplechase Has Only Just Begun: an Investor’s Perspective
UK Prime Minister Theresa May has cleared the first hurdle in her bid to secure a soft Brexit. Her Cabinet has backed the withdrawal deal UK and European Union negotiators have agreed to. But David Zahn, Franklin Templeton’s head of European Fixed Income, warns her most difficult challenge lies ahead.
Finding Value among Stretched US Valuations, Market Dislocations
In recent years, US market strength has lifted markets globally, despite recent bouts of market volatility. According to Templeton Global Equity Group, that US market strength has led to a widening valuation gap between US and global equities.
Assessing a Divided Congress and Market Fundamentals
Tuesday’s US midterm elections shifted US Congress to split control. Yet, Franklin Templeton Multi-Asset Solutions CIO Ed Perks says this expected alteration in the balance of power is unlikely to change his US economic outlook or lead to major changes in US policy. He also explains why he looks at multiple fundamental factors when assessing markets, rather than political outcomes alone.
US Equity Market: Are Things as Good as They’ll Get?
The US equity market’s ascent paused in October as investors digested rising rates, slowing global growth and the persistent question: “Are things as good as they’ll get?”
Change is Coming to the Retirement Landscape
In recent months, there has been heightened activity in Washington DC in the area of retirement policy, with plans and proposals that could meaningfully alter the landscape. Drew Carrington, head of Institutional Defined Contribution at Franklin Templeton Investments, and Michael Doshier, vice president, Retirement Marketing, discuss the latest legislative developments and ideas.
The Race to Harness AI Technology in Asia
Artificial intelligence (AI) and automation present enormous investment opportunities, some in ways we don’t even know yet. As the world adapts to technological advances, Franklin Templeton Emerging Markets Equity’s Sukumar Rajah and Eric Mok think some promising developments in Asia could dictate the pace of change in the burgeoning AI market.
Renewable Energy Gaining Steam
Renewable energy has been gaining steam for many reasons, as have the investment opportunities in the space. Ketul Sakhpara, portfolio manager and research analyst, Franklin Real Asset Advisors, outlines the three main drivers of interest, and where his team sees potential.
Fourth Quarter Hedge-Fund Strategy Outlook: K2 Advisors
In their fourth-quarter (Q4) 2018 outlook, K2 Advisors’ Research and Portfolio Construction teams take a deeper look at alpha, and why they feel it’s misunderstood. They believe offering these insights will help investors better understand the rationale for owning retail mutual funds that invest in hedge strategies.
A Few Words on Equity-Market Volatility
October has lived up to its reputation as a volatile month as concerns about rising US interest rates, slowing growth in China and upcoming US midterm elections have spooked many investors. Franklin Equity Group offers a few words on the recent turmoil, why volatility can unlock compelling opportunities and why the investment team still sees a compelling case for technology companies.
A Global Macro Perspective: Populism, Trade and Emerging-Market Volatility
Templeton Global Macro Chief Investment Officer Dr. Michael Hasenstab and Vice President and Deputy Director of Research, Dr. Calvin Ho, discuss emerging-market turbulence, the persistent concerns around trade policy and divergent growth trends in the developed world.
The US Yield Curve: Should We Fear Inversion?
There has been a lot of talk this year about the flattening of the US yield curve—which is a graphical representation of the spread between short- and long-term interest-rate instruments.
Social Security Giveth and Medicare Taketh Away
Retirees got some good news from the US Social Security Administration, as it recently announced a 2.8% bump in benefits in 2019, the largest increase in seven years. Unfortunately, the good news also came with some bad news—higher Medicare premiums that could offset those gains.
Global Economic Perspective: October
The current widespread optimism about the US economy is largely justified, in our view, by its strong fundamentals, particularly the positive backdrop for consumers. Despite the economy’s robust growth, we do not view the recent rise in US Treasury yields as heralding the start of a major selloff across bond markets.
Hasenstab: Focus on Fundamentals in US, Emerging Markets
Templeton Global Macro CIO Michael Hasenstab shares his thoughts on why he thinks US Treasury yields have moved higher. He also gives his take on recent weakness in emerging markets.
A View from Canada on the New USMCA
After more than a year of tense talks, Canada, Mexico and the United States have replaced the North American Free Trade Agreement (NAFTA).
Innovation Stretches Beyond Labels
Some of the market’s most innovative companies now call a new sector home, as part of a revamp of the Global Industry Classification Standard used by index providers to classify stocks.
As Public Attitudes Toward the Environment Change, So Should the Investment Approach
In the 16 years since the Principles for Responsible Investment (PRI) were first unveiled there’s been a sea change in awareness and concern for the environment among the general public. But that hasn’t necessarily been reflected in the asset management world.
Fed Full Steam Ahead
The US Federal Reserve (Fed) raised its benchmark short-term interest rate for the third time this year, which was no surprise to most market participants. Chris Molumphy, chief investment officer, Franklin Templeton Fixed Income Group, offers his take on the Fed’s “normalization” path in light of what he sees as an overall positive US economic backdrop.
Moving Up in Credit Quality for Better Durability
Some investment-grade bonds are riskier than their ratings imply, while high-yield bonds have seen some positive tailwinds. Meanwhile, a large number of bank loan agreements now favor borrowers over lenders. Franklin Templeton Fixed Income Group's Glenn Voyles, Marc Kremer, Matt Fey, Brian French and Reema Agarwal take a look at these areas of credit landscape today. They explain how credit research and long-term orientation helps them discern cash-flow durability in the companies they analyze and outline how they negotiate for better terms in credit agreements
Global Investment Outlook: How Much Further Can Global Growth Fly?
A number of market headwinds—including trade tensions, rising interest rates and a general fear the long-running US economic expansion may be facing fatigue—have cast a shadow over the markets in the first half of the year.
Then and Now: Mortgage-Backed Securities Post-Financial Crisis
A little over 10 years ago, few people had heard of mortgage-backed securities (MBS). Yet that changed when MBS brought the global financial system to its knees. Today, they’re still a pivotal part of the system, with the US Federal Reserve (Fed) the largest holder.
Views on Emerging-Markets Equity and Select EM Countries
In light of the Turkish lira and Argentine peso currency drops, fears of emerging-market (EM) contagion appear to be on the rise, and various EM currencies have been under pressure. Here, Franklin Templeton Emerging Markets Equity provides perspective on some of the impacted countries in the headlines recently: Argentina, Turkey, South Africa and Indonesia.
Riding the US Liquefied Natural Gas Wave
The United States is rapidly expanding its ability to export liquefied natural gas (LNG), as more countries look to embrace cleaner energy. Franklin Equity Group’s Matt Adams gives his outlook for US LNG and the possible investment implications.
Three Developments in Europe You May Have Missed over the Summer-and One You Didn't
The months of July and August are traditionally a little quieter for markets in Europe as participants take a summer break. But things don't stop completely. As the wheels get back up to speed, David Zahn, Franklin Templeton's Head of European Fixed Income, considers a few developments in Europe over the summer months that might have slipped under the radar.
Why We Think the US Equity Bull Market Could Keep Running into 2019
Now that the US equity bull market has officially hit the history books as the longest on record, some observers are concerned it could soon stumble. Grant Bowers, vice president and portfolio manager, Franklin Equity Group, outlines why he thinks it could keep running into 2019.
Trade Turmoil Doesn’t Derail Our Outlook for India
Trade tensions have spooked investors in recent months, including those in India’s stock market. Franklin Templeton Emerging Markets Equity’s Sukumar Rajah weighs in on the positive economic fundamentals he and the team see, and why they think India’s equity market should be able to weather recent challenges.
July Recap and Outlook: Frontier Markets Lead Rebound
July marked the first month of the calendar year where emerging markets posted positive performance overall, with frontier markets leading the way.
US Equity Bull Market Goes the Distance
The US stock market, as measured by the S&P 500 Index, just reached a historic milestone.
Global Economic Perspective: August
The US economy has continued to perform well on many fronts, with positive readings for growth, employment and inflation. In terms of growth, the stimulus effect from tax cuts was clearly visible in second-quarter 2018 data, and could be maintained for at least another quarter, in our view.
Is it Time for Value Stocks to Shine?
Since 2008, US growth stocks (particularly in faster-growing sectors such as technology) have tended to perform better than US value stocks, as the chart below shows.
Of Currencies, Trade and Other Clouds
Emerging markets have struggled in the first half of this year amid a storm of uncertainties. Franklin Templeton Emerging Markets Equity’s Chetan Sehgal examines issues that have acted as clouds on the asset class—including a stronger US dollar and trade skirmishes...
Speeding Toward Brexit, Some Off-Ramps Emerge: A Dialogue with Lord Kerr
The Brexit clock is ticking as the United Kingdom’s departure from the European Union (EU) is set to take place in March 2019. But is the UK ready to leave? And is there still a chance it won’t?
Unlocking Romania’s Potential
For nearly two years, frontier market Romania has been on index provider FTSE’s watch list for a possible upgrade to emerging-market status. However, some issues remain over the market’s attractiveness for foreign investors.
Cutting through the Noise: Trump, Trade and Twitter
In 2018, President Trump’s tweets on international trade have led to bouts of market volatility and concerns of a global economic slowdown. Against this backdrop, Franklin Templeton Multi-Asset Solutions’ Matthias Hoppe explains why he thinks economic fundamentals will determine the fate of the global economy more than Trump’s words will.
Can You Retire Your Retirement Risk?
Many (if not most) people think about retirement in terms of saving for the day they leave the workforce and won’t be collecting a paycheck any longer. The prospect of outliving one’s savings is therefore a top source of stress, along with being able to pay escalating health care costs.
Brexit: Are Markets Underestimating the Chances of the UK Not Leaving?
With nine months to go until the date on which the United Kingdom officially is due to leave the European Union (EU), much remains unclear both about the process and the outcome. The recent resignations of two prominent Brexiteers from the UK government has added further uncertainty to the outlook.
Global Economic Perspective: July
We think the US economy remains in good shape, with the rate of growth potentially picking up, a labor market that is tight but attracting new workers, and inflation that still seems relatively subdued. Boosted by tax cuts and spending increases, these favorable conditions could continue for some time.
Perspectives on Disruption
As our analysts and researchers travel the world surveying businesses, they hear a lot about disruption—the ability of new often-technology-backed companies to disrupt the status quo.
Disrupted Retirement: Is the US Facing a Crisis?
On our latest “Talking Markets” podcast, we listen in on a panel of experts discussing the potential US retirement crisis and the fear factors surrounding retirement disruption.
Convertible Securities: a Versatile Asset Class
Rising interest rates and volatile markets can create headwinds for all types of investors. Franklin Equity Group’s Alan Muschott makes a case for convertible securities, a hybrid asset class that he thinks can adapt to various market conditions.
Michael Hasenstab: An Update on our Global Markets Resilience Scores
Templeton Global Macro makes a compelling case that finding attractive opportunities in emerging markets lies in distinguishing the more resilient countries from the rest.
The Electrifying Outlook for Metals Demand
A steady roll-out of wireless products, such as power tools, vacuums, phones and computers over the past decade has driven increased demand for the metals that go into lithium batteries.
Digging into the Roots of US Trade Tensions
Talk of a “trade war” between the United States and several of its key trading partners continues to intensify. China has borne the brunt of the US tariffs targeting a wide range of goods, and has retaliated with threatened reprisals of its own, creating a tit-for-tat situation between the world’s two largest economies.
The Urge to Merge: Possible Implications from the AT&T-Time Warner Ruling
A recent US court ruling green-lighting the merger between AT&T and Time Warner marked an historic event that some say could open the door to more merger-and-acquisition (M&A) activity ahead. Sara Araghi, CFA, vice president, research analyst, Franklin Equity Group, and Marc Kremer, CFA, research analyst, Franklin Templeton Fixed Income Group, discuss some of the possible implications.
A New Development in Saudi Arabia’s Reform Story as MSCI Delivers Upgrade
Index provider MSCI’s decision to include Saudi Arabia in its emerging-markets index will likely transform the Kingdom’s equity market, and potentially those across the Middle East and North Africa (MENA) region, according to Bassel Khatoun and Salah Shamma, Franklin Templeton Emerging Markets Equity.
Social Security: It’s Healthier Than You Might Think!
Each year, Social Security’s Trustees report to Congress on the financial status of the program. This typically generates a number of anxiety-provoking media headlines about if/when it will run out of money. Gail Buckner, CFP, our personal retirement and financial planning strategist, takes a look at the facts. She says Social Security is actually in pretty good shape overall.
ECB Meeting: Fresh Clarity, But Let’s Not Get Ahead of Ourselves
The European Central Bank’s June meeting has offered some long-hoped-for clarity on the future direction of monetary policy in the eurozone. However, it hasn’t provided all the answers, and much remains open to interpretation. David Zahn, Franklin Templeton’s head of European Fixed Income, considers what might happen next and explains why he’s still not expecting a eurozone interest-rate hike before 2020.
Fed Gives US Interest Rates Another Bump in June
The US Federal Reserve continued its tightening path at its June policy meeting, raising its benchmark interest rate for the second time this year and seventh time since December 2015. Chris Molumphy, chief investment officer, Franklin Templeton Fixed Income Group, offers us a snapshot of the US monetary policy landscape in the wake of the meeting.
Three Things to Think about When It Comes to Trade
As the Trump administration continues to threaten tariffs targeting a variety of imported goods, from electronics to washing machines to automobiles, many market commentators have suggested the US-led trade skirmishes could turn into a trade war.
CEO View: What’s Changed 10 Years After the Global Financial Crisis?
At Franklin Templeton’s recent Global Investor Forum in New York, our CEO Greg Johnson participated in a panel discussion with three other CEOs in the financial services industry: James Gorman of Morgan Stanley; Jay Hooley of State Street and Barry Stowe of Jackson National Life.
In the Know: A Q&A on the Latest DOL Fiduciary Rule & SEC Proposal Developments
To say activity in Washington is being closely followed would be an understatement, with the consensus view that the Department of Labor’s Fiduciary Rule is all but officially vacated, and a recent proposal from the Securities and Exchange Commission (SEC) is in the middle of a 90-day comment period.
ECB Preview: Will Recent Italian Developments Influence Europe’s Tapering Timeline?
The future of the European Central Bank’s three-year-old quantitative easing program lies in the balance. Will the bank’s governing council use its scheduled June meeting to extend the program or confirm that asset purchases will end in September? David Zahn, Franklin Templeton’s head of European Fixed Income, believes recent European economic data and political developments in Italy point towards an extension. And he argues that means eurozone interest-rate hikes are unlikely before 2020.
Survey Highlights Women’s Retirement Insecurities
There has been heightened discussion recently about women’s inequality in many areas of society—including financial security. Gail Buckner, CFP, our personal retirement and financial planning strategist, explores the gender pay gap and how it has contributed to a poorer post-working life for many older women.
Oil Prices Hit Four-Year High, but Will the Surge Continue?
For the first time in a long while, geopolitics has been driving oil prices higher in an already tight market. With oil prices recently hitting a four-year high, gasoline prices have been climbing too, and analysts are carefully watching developments including the US withdrawal from the 2015 nuclear pact with Iran and re-imposition of economic sanctions on the country.
Tackling Student Debt and College Savings Plan Myths
The cost of a college education continues to rise, and along with it, student debt. Roger Michaud, senior vice president and director of college savings for the Franklin Templeton 529 College Savings Plan, and Mike O’Brien, director, Program Marketing, Global Client Marketing, look at how mounting student debt could have a long-term impact on one’s future.
Global Economic Perspective: May
In this month's Global Economic Perspective, our Fixed Income Group opines on rising energy prices, US Treasury yields, emerging-market currency pressures and global economic growth.
An Unconventional New Government in Italy
Two months after the Italian election, the country is on the verge of a new government led by the right-wing La Lega and left-wing Five Star movement. While markets take some time to digest the full implications of this unusual tie-up, David Zahn, Franklin Templeton’s head of European Fixed Income, offers his analysis of the political situation.
Is It Time For Value Investing to Return to the Limelight?
In recent years, value investing has played second fiddle to growth investing. But now could the stage be set for its return to the limelight? Franklin Mutual Series CEO Peter Langerman weighs in with his thoughts and explains why he is optimistic.
Will 2018 Be a Record Year for US Dividend Increases?
Some investment leaders from Franklin Equity Group explain why US tax reform and sectoral trends could lead more companies in select industries to raise dividends this year.
Talking Trade Tensions, Inflation and Volatility
Global growth has been accelerating, but there are a few potential headwinds that could cause it to stall. Three of our senior investment leaders—Ed Perks, Chris Molumphy and Stephen Dover—recently participated in a panel discussion on the potential impact of trade tensions, inflation and other issues on their radar.
Will the Roar of Market Tensions Tame Global Growth?
The first quarter of 2018 started out like a lamb but went out like a lion as long-dormant volatility began to roar. Issues like inflation fears, trade tensions and geopolitical risks contributed to market turbulence, leaving many investors wondering whether these issues will put a damper on global growth—and end the US market’s nine-year bull run.
Australia: Caught in the Middle of US-China Trade Tensions?
As US-China trade tensions continue to make headlines, some investors may not realize the fallout will affect many other economies, one being Australia.
Second Quarter Hedge-Fund Strategy Outlook: K2 Advisors
In their second-quarter (Q2) 2018 outlook, K2 Advisors’ Research and Portfolio Construction teams share their views on why investors should not fear the return of market volatility—and why it may unlock opportunities for active managers. We believe offering these insights will help investors better understand the rationale for owning retail mutual funds that invest in hedge strategies.
Health Savings Accounts: The Intersection of Retirement and Health Care
The increasing costs of health insurance borne by employees and employers alike has spawned a variety of plans and strategies to help manage the expenses. Among these are health savings accounts (HSAs), which first came onto the scene in 2003.
Will 2018 be a Banner Year for US Bank Stocks?
Franklin Equity Group Vice President and Portfolio Manager Matt Quinlan explains why he thinks US banks could benefit from a more favorable economic and regulatory environment. Given this healthy backdrop, he believes select large-cap bank stocks may increase dividends and stock buybacks in the next two years.
Who Said the Rules of the Game Could Change Because LIBOR’s Going Away?
There’s been a lot of discussion in the fixed income world about the end of the London Interbank Offered Rate (LIBOR) and what might replace it. But what hasn’t been as widely discussed is an important consequence for investors in this space: changes to LIBOR language in new-issue and amended credit agreements—particularly how these changes are implemented.
Why Tech-Sector Volatility Doesn’t Worry Us
While a few companies in the US technology space have been in the hot seat lately, Jonathan Curtis, vice president and research analyst with Franklin Equity Group, is largely unfazed. He said temporary “blips” affecting certain stocks are par for the course as consumers get used to new technologies—and how they impact our lives.
Symmetry Policy: How to Adapt to a More Volatile Market Environment
It’s easy to understand why the return of equity market volatility in the first quarter of 2018 caused some consternation for investors.
How Safe Is NAFTA?
With US-led trade skirmishes opening up on multiple fronts, it’s natural to wonder if the North American Free Trade Agreement (NAFTA) is in jeopardy.
Implications of DOL Fiduciary Rule Decisions and RESA Legislation
Some new developments in Washington and recent court rulings have implications for those saving and investing for retirement. Drew Carrington, head of Institutional Defined Contribution at Franklin Templeton Investments, along with Michael Doshier, head of retirement marketing, examine the status of the Retirement Enhancement and Savings Act (RESA) and what it might mean for both plan sponsors and participants.
Why There’s Never Been a Better Time to Invest in Innovation
Franklin DynaTech Fund is celebrating its 50th anniversary this year. To mark the occasion, we caught up with Franklin Equity Group Vice President Matt Moberg, portfolio manager of the fund. He explains why he thinks we are in the middle of a period of unprecedented innovation where five technology-driven themes are starting to disrupt various industries.
Artificial Intelligence: Real Influence
Having our global headquarters in the midst of California’s Silicon Valley gives Franklin Templeton a particular insight into the development of the technology sector. And often, new technologies can influence more than just a single industry or sector. We believe investors should consider potential market impacts although how these technologies will play out remains to be seen.
DOL Fiduciary Rule Still in Limbo After Latest Court Ruling
The US Department of Labor’s (DOL) Fiduciary Rule has been the subject of much debate, and still remains largely in limbo as it works its way through the court system. The rule, which expands the scope of persons deemed to be a fiduciary, was to go into effect in January 2018, but full implementation was delayed.
Fed Remains in Tightening Mode in March
The US Federal Reserve remained in tightening mode at its March monetary policy meeting, raising its benchmark interest rate for the sixth time since December 2015.
Banking Sector Under the Microscope
The US financial sector faced heavy scrutiny in the wake of the global financial crisis of 2008-2009, but the end result was that banks emerged in better shape overall, according to Shawn Lyons, vice president and portfolio manager, Franklin Templeton Fixed Income Group.
Can Anything Throw the Nine-Year-Old Bull Off its Stride?
The current US equity bull market turned nine years old on March 9, 2018. That’s the second longest run without a correction of 20% on record. It’s natural to wonder if the tide is going to turn.
Global Economic Perspective: March
We see the US economy as maintaining its current path of respectable but not overly robust growth. Underlying fundamentals and economic momentum remain constructive, while we do not foresee an acceleration in growth to a level that would swiftly create inflationary pressures.
Growth and Value Investing: A Complementary Approach
Growth and value investing are often seen as competing styles, with one outperforming or underperforming the other during different periods of time and market cycles. While the approaches may differ, Stephen Dover, head of equities at Franklin Templeton Investments, and Norm Boersma, chief investment officer of Templeton Global Equity Group, say growth versus value doesn’t have to be an either-or proposition.
Environmental, Social and Governance Factors in Global Macro Investing
Environmental, social and governance (ESG) factors are being recognized in fixed income investing as value-added indicators of potential economic performance. In the latest edition of “Global Macro Shifts,” the Templeton Global Macro team outlines how it integrates ESG factors into its research process.
How Infrastructure Companies Could Rebuild the World
While it seems US politicians rarely see eye-to-eye on anything, the fact that America’s aging infrastructure needs attention is one issue that has attracted clear bipartisan agreement. Yet, it’s unclear who is going to foot the bill for the sweeping improvements that seem to be needed.
Why US Tax Reform Could Drive Dividends Higher
In the first few months of 2018, some US companies and multinationals have raised their dividends by 10% or more—a higher percentage increase than we’ve seen in a few years.
Italian Election Result: Political Uncertainty is Business as Usual for Italy
No outright winner emerged from the Italian general election, but as David Zahn, Franklin Templeton’s head of European Fixed Income, explains, that situation is normal for Italy. He expects a muted response from European bond markets but cautions there may be consequences down the road if the authorities fail to take the need for reform seriously.
Global Economic Perspective: February
The opening months of 2018 have seen volatility return to global financial markets, but we think it is important to stress US economic fundamentals have remained broadly the same. After an unusually long period of calm in many markets, the reappearance of volatility at some point seemed likely, even if the speed of market gyrations has been unsettling for investors.
Italian Election Outlook and Why We Don’t See an ECB Rate Hike Before 2020
The upcoming Italian election is not attracting the same sort of attention among investors as votes last year in France and Germany. For that very reason, David Zahn, Franklin Templeton’s head of European Fixed Income, believes an unexpected result might provoke an outsized market reaction.
1-on-1 With Michael Hasenstab: Market Changes and Challenges
Hasenstab shares his thoughts on navigating today’s market challenges. He covers recent market volatility, inflationary threats in the United States, upcoming elections in Latin America, potential “fault lines” in Europe and credit risk in China.
Fundamental Changes That No Muni Investor Should Ignore
We believe it’s time to take a good hard look at the municipal bond market, because what was true 10 years ago, very well may not be true today.
Seeing the Big Picture in Market Corrections
While we don’t know when the equity market’s recent volatility will settle down, it’s important to consider the big-picture, fundamental backdrop for the market, and not get caught up in short-term sentiment swings, according to Franklin Templeton’s head of equities, Stephen Dover. And, he believes the fundamental backdrop still looks solid.
Keeping Calm When Volatility Strikes
The recent drops in the stock market can lead to a lot of questions and concerns about what investors should do. Considering the market has been on a historic run to continuous record highs and double-digit gains over the past year, it’s not entirely unexpected to experience a pullback.
Insights from the 2018 US Consumer Electronics Show
In January of this year, Franklin Equity Group’s Jonathan Curtis and Robert Stevenson headed to Las Vegas for the Consumer Electronics Show (CES), the biggest technology trade show in the United States. Here, they report back on some of the event’s highlights, including the battle of “smart speaker” platforms, the road ahead for autonomous cars, artificial intelligence and other tech trends.
The Next Chapter
It is with mixed emotions that I’m leaving Franklin Templeton Investments, but I’m excited about the next chapter of my life and what the future will bring. It’s been a bittersweet whirlwind of activity after I announced plans to retire after more than 30 years with the company.
The Underappreciated Story: How Brexit Threatens to Shift the Balance of Power in the EU
For fixed income investors eyeing opportunities in Europe, 2018 should be the year economic fundamentals reassert their worth, according to David Zahn, Franklin Templeton’s head of European Fixed Income. Nonetheless, Zahn believes many investors are underappreciating the long-term implications for Europe of the biggest political uncertainty for the region—Brexit.
First Quarter Hedge-Fund Strategy Outlook: K2 Advisors
In their first-quarter (Q1) 2018 outlook, K2 Advisors’ Research and Portfolio Construction teams believe favorable dispersion has created reasons for optimism in three main hedge-fund strategies: Long/Short Equity – Europe, Relative Value and Discretionary Macro. We believe offering these insights will help investors better understand the rationale for owning retail mutual funds that invest in hedge strategies.
Global Economic Perspective: January
The constructive conditions for the US economy remain in place, in our view, in keeping with an increasingly solid expansion across the rest of the world. US consumers have been benefiting from an economy that appears close to full employment and a stock market at record levels, while a vibrant corporate sector has been buoyed further by recent tax changes.
Emerging Markets Through the Years
As many of you may be aware by now, I announced plans to retire after more than 30 years with Franklin Templeton Investments, effective January 31, 2018. Before I share my final, parting words on this forum, I’d like to take a look back at how emerging markets have changed since I first began investing in the space.
Emerging Markets Fourth-Quarter Recap and Outlook: 2017 Ends with a Bang
Templeton Emerging Markets Group has a wide investment universe to cover—tens of thousands of companies in markets on nearly every continent. While we are bottom-up investors, we also take into account big-picture context.
Will US Tax Reform Alter the Muni Landscape?
With a new US tax law now upon us, many investors are questioning what the potential impacts may be on their portfolios—and on their potential investment selections going forward.
The Year Ahead: Will the US and Global Expansion Continue in 2018?
January is a month of resolutions and predictions, and perhaps more often than not, both tend to be abandoned come spring. While we don’t have a magic crystal ball to predict where the markets may be headed next, we do have a team of respected professionals who recently assembled to discuss whether they think last year’s economic momentum could continue—and where they see potential threats on the horizon.
Shedding Light on the Utilities Sector
US tax reform legislation dampened investor enthusiasm for utilities stocks in the last four months of 2017. Here, Franklin Equity Group’s John Kohli says that view may be creating opportunities for long-term investors. He digs deeper into industry fundamentals that he thinks make for an attractive longer-term investment case for the sector.
Emerging Market 2018 Outlook
I have been championing the case for emerging-market investing through many market ups and downs, but the task was a bit easier in 2017. Emerging markets (as measured by the MSCI Emerging Markets Index) saw a positive performance in 2017 and outperformed developed markets (as measured by the MSCI World Index) for a second year in a row.
Winded Markets May Face a More Difficult Climb in 2018
Global stocks benefited from broad economic growth in 2017, and some forecasters expect growth next year to be slightly better. Yet Franklin Equity Group’s Coleen Barbeau thinks equity valuations, particularly in the US market, already reflect that rosy outlook.
Global Investment Outlook 2018: Reflections on Growing Economies and Fading Stimulus
As markets shift away from the recovery era of monetary accommodation amid synchronized global growth, some investors may be wondering where potential opportunities can be found. We present a summary outlook for the year ahead - why US interest rates look poised to keep heading higher, why global equities may have more room to run and why investors may need to be more selective in the fixed income space.
US Tax Reform: This May Not Be the End
Congress successfully passed sweeping changes to US tax policy, which President Trump signed into law in December. Pierre Caramazza and Michael Doshier are pleased our current retirement savings system was left largely intact, but caution that this tax legislation still has some open items.
The Market Implications of US Tax Reform a Bit Unclear
Efforts to overhaul the US tax code have been a long time in coming (more than three decades), but this year it finally came to fruition. Congressional approval of sweeping tax reform will impact individuals, businesses—and the entire economy. Ed Perks, chief investment officer, Franklin Templeton Multi-Asset Solutions, offers his perspective of the likely economic and market implications.
Global Economic Perspective: December
We believe the US economy’s current combination of moderately strong growth and low inflation is likely to see a further slow-but-steady tightening of monetary policy, following the confirmation by the US Federal Reserve (Fed) at its December meeting of a widely expected interest-rate rise.
Back to Brazil
I visited Brazil in the spring of this year, but wanted to go back and explore more areas of the country. Brazil has faced some hard times but appears to be bouncing back from a prolonged recession, so I was interested to gauge the mood of the people and businesses there.
Self-Driving Vehicles: The Race to Get Them on the Road
Technological advancements over the past two decades have moved the idea of self-driving cars from the realm of science fiction to fact. Recently, Franklin Templeton Investments assembled a panel of professionals to discuss the competition between traditional vehicle manufacturers and technology companies in the race to develop a truly autonomous car.
Fed Delivers Another December Rate Hike
The US Federal Reserve delivered another interest-rate hike at its December monetary policy meeting, marking the fifth such move in its tightening series starting in December 2015.
US Tax Reform: What Investors Need to Know
On December 2, Senate Republicans managed to obtain enough votes to pass sweeping US tax reform legislation, but with several changes compared with the original House of Representatives' bill. At more than 470 pages, the "Tax Cuts and Jobs Act" is certainly not a light read. But, it has some important implications for individuals and corporations, for better or worse in some cases.
Why Macron’s Reform Agenda Is Boosting Business Optimism
Market observers have long blamed France’s labor code and other policies for the country’s slow growth and high unemployment. Yet, Katrina Dudley, portfolio manager, Franklin Mutual European Fund, sees a renewed sense of business optimism in France under President Emmanuel Macron.
China Clears Way for More Foreign Participation
At this time of the year, smog in Beijing, China, can be overwhelming. Throughout the city this fog/smog prevents the sun from shining through. But, the pollution problems have not clouded financial activity.
Tax Reform and the Possible Impact on Retirement
US tax reform looks to impact many areas of our lives, and one of these could be the way Americans save and invest for retirement. As we wait for Congress to refine and vote on the latest tax proposals, Drew Carrington, head of Institutional Defined Contribution at Franklin Templeton Investments, breaks down how lawmakers might target retirement dollars for tax revenue.
Is the Energy Sector Starting to Turn
Recalling the shocks of the sharp oil-price downturn back in 2014-2015, many investors have remained wary of energy stocks even as prices began to rebound this year.
Finding My Roots in Germany, and a Piece of Musical History
While emerging markets have been my area of focus for several decades, I also travel extensively to developed countries, too. It’s quite enlightening to see how once “emerging” countries still cherish their heritage.
Global Economic Perspective: November
The economic backdrop has remained supportive, both in the United States and globally, and should allow the US Federal Reserve (Fed) to continue raising interest rates at a measured pace, in our view. Jerome Powell’s nomination as Fed chair points to continuity in monetary policy in the near term...
How Technology Has Set Industries on a Journey of Opportunity
Technology is transforming nearly every industry, from healthcare to retail to transportation. Franklin Templeton Investments recently hosted an event examining the race to develop and market autonomous vehicles entitled, “Along for the Ride: Evaluating the Impacts of Self-Driving Cars.”
Where Might Credit Risks Exist? Follow the Supply
In 2017, corporate credit, including high yield, saw a resurgence in interest within a longer-term trend of increasing supply. In recent weeks, however, it has shown some cracks.
Eastern Europe and the Polish Surprise
My recent travels took me to Eastern Europe, where I had the opportunity to meet with colleagues and discuss the latest developments in the region. I thought I’d invite Greg Konieczny, who is based in Romania, to share some of his insights.
Our Message to Congress: Save Our Savings!
One of President Donald Trump's campaign promises was to overhaul the US tax code. The administration recently released its tax proposal, and the pundits have been weighing in on how it will affect us all. As Congress continues to debate the latest version of the plan, which passed through the House of Representatives on November 16,
Structural Growth Drivers Behind Emerging-Market Economies
My colleagues and I have been championing the message that emerging markets have changed—they are no longer just commodity plays. Old economic models are undergoing a transformation in many cases, opening up exciting new investment opportunities.
Why Australia May Not Join the Rate-Tightening Party
In 2017, the Bank of Canada and the Bank of England joined the US Federal Reserve in raising interest rates from at or near record lows. However, Chris Siniakov and Andrew Canobi of Franklin Templeton’s Australian Fixed Income team say the Reserve Bank of Australia will likely take a more cautious approach...
A Story of Risk Management, and Flying to the Moon
Risk management is a key part of many endeavors, from space travel to investment management. In either case, achieving one's goals requires awareness of what could go wrong, as well as careful attention to details in often-changing conditions to ensure the smoothest possible journey
The Fed’s Long Unwinding Road
In the latest edition of “Global Macro Shifts,” the Templeton Global Macro team examines the plans to start shrinking the US Federal Reserve’s (Fed’s) balance sheet and the potential impacts to financial markets.
Croatia’s Many Cultural Ties
Many years ago, I had visited Chile and wanted to learn more about a mining company there. Its CEO happened to be a Croatian who had immigrated to Chile and became quite wealthy. At the time of our meeting in the late 1990s, we traveled together to a large Chilean copper mine and he showed me the entire operation.
Preparing for a Possible Post-LIBOR World
Even though they may not know it, many global consumers have at least one loan tied to the London Interbank Offered Rate (LIBOR). Yet, LIBOR’s regulator is calling for an end to the rate by the end of 2021.
In the Know: Trump’s Fed Chair Pick Seen as Market Positive
Janet Yellen’s term as US Federal Reserve (Fed) chair ends early next year, and President Donald Trump decided not to extend her tenure as head of the US central bank. His pick to lead the Fed is Jerome Powell.
Retirement Income Planning Takes a Flexible Approach
If you are like many people, you probably have put plenty of thought into what your ideal retirement would look like. Maybe it involves exotic travel, pursuing a favorite hobby or spending more time with friends and family.
Science Fiction to Science Fact: The Rise of the Machines
The rapid expansion of artificial intelligence (AI) has generated a lot of excitement, but also some (perhaps justified) paranoia. Will computers replace—or even overtake—human beings?
Social Security Benefits Set to Increase, but Don’t Get Too Excited
Retirees were likely quite excited to see news that their Social Security benefits are set to rise in 2018. Gail Buckner, CFP, our personal retirement and financial planning strategist, says of course that’s a welcome development. However, she points out the 2% increase still leaves many Americans far short of what they are likely to need to meet expenses.
Why Abe’s Victory Could Help Lift Japanese Stocks
Shinzo Abe’s coalition victory in the October 22 snap election helps pave the way for his fourth term as Japanese prime minister. Here, Templeton Global Equity Group’s Cindy Sweeting and Alan Chua give their take on what Abe’s pro-growth policies could mean for Japan’s investment landscape.
Emerging Markets Third-Quarter Recap: A Stellar Rally
Templeton Emerging Markets Group has a wide investment universe to cover—tens of thousands of companies in markets on nearly every continent. While we are bottom-up investors, we also take into account big-picture context. Here, I share the team’s overview of what has happened in the emerging-markets universe in the third quarter of 2017, including some key events, milestones and data points to offer some perspective.
A Selective Look at Corporate Credit
Even in the face of rising US interest rates over the past year, corporate credit has been resilient, particularly in the high-yield category. Ed Perks, executive vice president and chief investment officer, Franklin Templeton Multi-Asset Solutions, takes a look at the corporate credit landscape and says fixed income investors still have plenty of reasons to be positive about the asset class.
Global Economic Perspective: October
Recent data have supported our view that the drivers of the US economy’s solid expansion remain in place, and should allow the US Federal Reserve (Fed) to move further toward its goal of normalizing interest rates. Some data releases have clearly been skewed by the recent major hurricanes, but we feel any negative impact on the economy is likely to be transient and outweighed by demand arising from reconstruction.
Putting Geopolitical Tensions into Perspective
When world leaders talk, markets react. And with social media becoming mainstream, politicians have a new way of getting their message to the masses.
China’s Congress Convenes
This month, China’s leadership kicks off its 19th Communist Party Congress, a meeting which sets the agenda for China’s political, economic and even social path in years to come. More than 2,000 delegates from China’s ruling elite attend the Congress, which takes place every five years.
Scoping out South Korea’s Investment Landscape
I’ve recently shared some of my views about rising tensions on the Korean peninsula as well as the political and business landscape in South Korea, which are often intertwined. While there are challenges and uncertainties in South Korea, we haven’t so far let that deter us as investors.
Fourth Quarter Hedge-Fund Strategy Outlook: K2 Advisors
K2 Advisors seeks to add value through active portfolio management, tactical allocation and diversification across four main hedge strategies: long/short equity, relative value, global macro and event driven. In their fourth-quarter (Q4) 2017 outlook, K2 Advisors’ Research and Portfolio Construction teams share the key market events they have an eye on.
Business and Politics in South Korea
My recent travels took me to South Korea at an interesting time given mounting tensions with its neighbor to the north. My colleagues and I got a pulse check on some of the reforms taking place, including those related to the family-run conglomerate companies known as chaebols.
Lessons Learned from the Global Financial Crisis
It’s been roughly 10 years since the 2007–2009 Global Financial Crisis began to unfold. It left lasting scars on the global economy and left many investors deeply wounded, too. Here, Tony Coffey, senior vice president and portfolio manager, Franklin Templeton Multi-Asset Solutions, explains why investors who sold everything in a panic probably bore the worst scars.
Does Macron’s EU Reform Agenda Need German Support?
Philippe Brugere-Trelat, Franklin Mutual Series executive vice president and portfolio manager, Franklin Mutual European Fund, discusses the outlook for French President Emmanuel Macron’s eurozone proposals and European equities in the current political climate. Is Macron’s eurozone “wish list” in jeopardy?
Tensions Rise on the Korean Peninsula
The world is watching the Korean peninsula. The situation between North and South Korea has been tense for a long time, but it has been escalating amid increasingly bold rhetoric and threats from the leaders of North Korea and the United States.
What’s Next For Europe as Merkel Is Re-elected
Angela Merkel’s re-election as German Chancellor was very much expected, but the implications of her victory are harder to predict. Here three of our portfolio managers with a particular interest in Europe share their views on what Merkel’s victory could mean for the region.
Why Gold-Mining Stocks Could Regain Some Luster
Here, Franklin Equity Group's Steve Land digs deeper into industry fundamentals that he thinks make for an attractive longer-term investment case for gold or gold stocks
Global Economic Perspective: September
The issues that have dominated news cycles in recent weeks should not obscure the robust underlying fundamentals of the US economy, in our view. Though some short-term weather-related disruption is possible, the economy seems to be maintaining its path of moderately strong growth, aided by healthy contributions from consumer spending and business investment.
The Fed’s Balancing (Sheet) Act
The Federal Reserve’s September policy meeting played out largely as expected, as US monetary policymakers left the central bank’s benchmark short-term interest rate unchanged. The Fed did clarify when it would begin to unwind its hefty balance sheet, and updated its economic forecasts and interest-rate projections.
Emerging Markets in the Digital Age
My colleagues and I have been actively speaking about the evolution taking place in many emerging markets over the past few decades. We’ve seen dramatic shifts occurring, with the often one-dimensional economic models of the past giving way to new and diverse growth drivers.
How the German Election Could Dictate Europe’s Future Direction
As Germany prepares to go to the polls in its general election, David Zahn, Franklin Templeton Fixed Income Group’s head of European fixed income, considers what the result could mean for Europe, the European Union and the eurozone.
Time to Reset Expectations?
Global markets have been relatively calm this summer despite many uncertainties. Geopolitical risks have continued across the globe, and in some areas, looming monetary policy changes also appear likely. A key question for many investors is whether the sleepy summer period of low volatility will give way to a more turbulent autumn.
Is France on the Cusp of a Thatcher Moment?
French President Emmanuel Macron is preparing to take on France’s powerful unions as he attempts to overhaul the country’s labor code. Here, Philippe Brugere-Trelat, Franklin Mutual Series executive vice president and portfolio manager, Franklin Mutual European Fund, explains why a Macron victory on this front could open up opportunities for investing in French equities.
Why ECB Tapering Could Prompt a Change in Bond-Market Philosophy
Speculation had been rife that the European Central Bank might have used its September Governing Council meeting to signal the start of tapering for its quantitative easing program. That confirmation didn’t come, switching attention to the October 26 meeting.
On Travels and Travails
As the focus of my work is emerging markets, I don’t spend a lot of time in the United States anymore, even though I grew up there. But like many people, I took a bit of time off this summer to enjoy a visit with family. We traveled to Mackinac Island in the state of Michigan, situated in Lake Huron.
ASEAN’s Golden Anniversary
The Association of Southeast Asian Nations (known as ASEAN) celebrated its 50-year anniversary in early August. The regional cooperative was established in 1967 with Thailand, Indonesia, Malaysia, Philippines and Singapore as founding members. Brunei Darussalam, Vietnam, Lao PDR, Myanmar and Cambodia later joined.
The End of the Eurozone’s QE Era?
As the traditional summer lull in market activity draws to a close, investor attention turns to key monetary policy meetings across the globe, kicking off with the European Central Bank meeting on September 7, which some commentators believe could see the announcement of a change in monetary policy approach.
Macron at 100 Days: New French President Faces Busy Autumn
A large chunk of French President Emmanuel Macron’s first 100 days in office came at a time when many Europeans were on holiday break. Here, Philippe Brugere-Trelat, Franklin Mutual Series Executive Vice President and Portfolio Manager, Franklin Mutual European Fund, says it’s unfair to judge Macron on such a short timeframe.
Travels in Myanmar: A New Frontier
Myanmar represents one of the newest frontier markets, and is one I’ve been anxious to learn more about. Long isolated with a military regime, Myanmar has been undergoing a transition over the past few years. After five decades of military dictatorship, it is now under civilian rule.
Global Economic Perspective: August
In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group takes a look at recent US economic data, and increased skepticism among many market participants about whether the Federal Reserve will implement another increase in interest rates before the end of the year.
US Tech Sector: Continued Run-Up or Correction Coming?
Since the infamous “dot com” meltdown nearly two decades ago, people have tended to question any sort of extended run-up in technology-sector stocks.
Las Vegas, Macau and the Future of Work
A few months ago I was honored to speak at the prestigious SALT investment conference in the US city of Las Vegas. It had been quite a while since I’d been to Las Vegas. The activity and energy of the place really surprised me, even though I don’t gamble.
Navigating an Uncertain Second Half
Receding political anxiety and a gathering economic recovery in Europe helped global equity markets advance in the first half of 2017. Yet Templeton Global Equity Group’s Cindy Sweeting and Tony Docal say investors should be somewhat cautious in the second half of the year.
India’s Reform Movement Gains Momentum
India has embarked on a sweeping reform movement under Prime Minister Narendra Modi, which has attracted investors’ attention. Templeton Global Macro CIO Michael Hasenstab recently visited India, and takes a look at some of the reforms he’s most excited about as a global fixed-income investor.
Mid-Year Outlook: The Resurgence of Emerging Markets
Emerging-market (EM) equities (as represented by the MSCI Emerging Markets Index) have extended their 2016 recovery. In the first half of 2017, the MSCI EM Index returned 18.60%, compared with an 11.02% gain in the MSCI World Index.
An Active Look at Small-Cap Investing
Overall, we believe small-cap stocks in emerging markets offer attractive prospects for active managers. A multitude of mispriced securities, market inefficiencies and a paucity of research provide considerable investment opportunities, in our view.
Global Economic Perspective: July
In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group dives into diverging central bank policy and weighs in on whether the European Central Bank is likely to be less accommodative—and what its timing might look like.
Don’t Believe Everything You Hear about Social Security!
If you’re like many working Americans, you may be concerned about the state of Social Security and whether it will be there for you when you retire. Gail Buckner, CFP, our personal retirement and financial planning strategist, explores some myths about Social Security and eases some concerns about its future.
How the Asian Financial Crisis Reshaped Emerging Markets
Twenty years ago, the world was standing on the brink of the Asian Financial Crisis. Here, Templeton Global Macro CIO Michael Hasenstab looks at how the response of local policymakers in the subsequent two decades has impacted emerging markets in general.
Despite Scary Headlines, No Big Changes to Social Security’s Outlook
Every year the Trustees of the US Social Security and Medicare trust funds provide their report on the current and projected financial status of these programs.
Hedge-Fund Strategies Get a Second Wind
After three disappointing years in the middle of this decade, it's been a smoother course for hedge-fund strategies over the past 12 months. K2 Advisors' Senior Managing Director Brooks Ritchey offers his analysis to explain why he sees some tailwinds ahead.
Emerging Markets Second-Quarter 2017 Recap: The Streak Continues
Here, I share the team’s overview of what happened in the emerging-markets universe in the second quarter of 2017, including some key events, milestones and data points to offer some perspective.
Third Quarter Hedge-Fund Strategy Outlook: K2 Advisors
K2 Advisors seeks to add value through active portfolio management, tactical allocation and diversification across four main hedge strategies: long short equity, relative value, global macro and event driven.
Addressing Always-Connected Technology
Intensifying demand to have everything at one’s fingertips seems to be the driving force behind the innovation in technology, finance and even industrials. Franklin Equity Group’s Matt Moberg, vice president and portfolio manager, Franklin DynaTech Fund, observes a general shift in the technology industry to address evolving consumer needs.
Looking Back 20 Years: Lessons of the Asian Financial Crisis
July marks the 20th anniversary of what was considered to be the start of the Asian Financial Crisis (AFC), which sent shockwaves through the region and beyond. The crisis was thought to have started in Thailand in the summer of 1997, although its roots stem from even earlier systemic problems, namely in the financial sector.
Short-Term Fears Seem to Affect Millennial Investors in Particular
Many investors who lived through the Global Financial Crisis of 2007-2009 still might bear some scars, according to Franklin Templeton’s annual Retirement Income Strategies and Expectations (RISE) survey. The survey explores individuals’ attitudes and expectations about retirement and how prepared people feel regarding their future.
China: Building Roads to the Future
China is forging new global connections and expanding trade and market access in many ways. The country does seem to be opening its capital markets and working to become more transparent. We have seen the success of stock linkages between mainland China and Hong Kong, and recently, a new bond market connection has been announced.
Value Update: Where Is the Next Pocket of Opportunity?
A year ago, Templeton Global Equity Group’s Norm Boersma, Cindy Sweeting and Heather Arnold penned an article for Beyond Bulls & Bears discussing the signs of a revival in value stocks. With the nascent rally in global value stocks underway, the trio return along with their colleague Tucker Scott to outline where they now see the next pockets of overlooked potential opportunities for patient bargain hunters.
Global Economic Perspective: June
In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group examines whether inflation may gain momentum in the United Sates, why it’s pleased the European Central Bank has resisted tapering of its quantitative easing program and why investors in all markets need to be cognizant of political risks.
Uncharted Terrain: Today’s Global Market Drivers
Despite some uncertainties, economic improvements in developed and emerging markets have supported a positive mood across both equity and fixed income this year.
Readers’ Questions Answered
While I can't always respond to each of your questions directly, I do enjoy hearing from my readers and followers and value your feedback. I am quite delighted to see people from all over the world reaching out via my blog, Twitter and LinkedIn. Keep them coming! Here are a few; hopefully one of my responses will answer a question of yours.
UK Election Result: Grounds for Optimism in the Medium Term?
As equity markets digest the implications of another surprising UK election outcome, Colin Morton, vice president, portfolio manager, Franklin UK Equity Team, analyzes the immediate aftermath and asks whether the result could offer some grounds for optimism over the medium term.
Theresa May's Shock Defeat Threatens Further Volatility
In the sort of unexpected twist that observers have come to expect from elections recently, UK voters have dealt a bitter blow to Prime Minister Theresa May, robbing her of her narrow parliamentary majority. With further financial market volatility on the horizon, David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, offers his view of the situation.
The Politics of Health Care
Changing political policies and priorities can impact certain market sectors-for better or worse. Health care costs and prescription drug pricing were hot-button issues in the United States during the 2016 presidential election, and the Trump administration has been pushing forward its own health care agenda. So far this year, the health care and biotechnology (biotech) sectors have shaken off uncertainty, but are investors too optimistic? Franklin Equity Group's Evan McCulloch says drugs actually behave more predictably than politicians-but he sees reasons to affirm the market's positive outlook.
Busting the Frontier-Market Myths
Although frontier markets are a small subset of the emerging market universe, we think they represent an important constituency that offer some compelling potential opportunities. Here, I've invited my colleague Carlos Hardenberg, senior vice president and director of frontier markets strategies at Templeton Emerging Markets Group, to outline some of the opportunities he sees in these dynamic markets and debunk some of the urban myths..
Brazil’s Political Bumps
Just when Brazil’s economy seemed to be turning a corner, a new political scandal has caused a strong market reaction, sending Brazil’s stock market into a tailspin. President Michel Temer, who came into office following the impeachment of former President Dilma Rouseff due to a corruption scandal, is now caught up in a corruption scandal of his own
Spryng into Saving for College
As the cost of a college education continues to rise, parents (and their children) are coming up with creative ways to finance it.
Why Liquid Alternatives Now
K2 Advisors’ Founding Managing Director David Saunders is speaking at the prestigious SALT conference this month in Las Vegas, where he’ll discuss the liquid alternatives landscape and why he thinks now’s the time for investors to consider this asset class.
Reform and Reflation in China
China’s National People’s Congress met in March, which seemed like a good backdrop for our annual Templeton Emerging Markets research meeting, which took place the same month in Shanghai, China.
Trade and Taxes in a World With Borders
In the latest edition of "Global Macro Shifts," the Templeton Global Macro team examines potential US corporate tax reform and the possible impacts of a border adjustment tax (BAT). Read an excerpt from the paper.
South Korea Votes for Change
Voters across the globe seem to be clamoring for change, and South Korea’s presidential election may be viewed as another example. Moon Jae-in, considered a left-leaning liberal, won the presidential election in South Korea.
French Election Result: Macron Wins, But Can He Deliver?
There were no surprises as French voters elected Emmanuel Macron as their new president after the second round of voting. Franklin Templeton’s investment professionals share their thoughts on the prospects of a Macron presidency and suggest it might not be plain sailing for the self-styled political outsider.
An Ocean Voyage in Southeast Asia
Air travel is a quick and convenient way to get from one place to the next, but sometimes it’s nice to slow down and enjoy the journey. Traveling by sea gives you time to contemplate what you’ve seen at different ports of call, from sleepy seaports to bustling shipping and shopping centers.
US Equities: Policy Smoke or Solid Pillars?
With US equities charging to new heights, some market observers are questioning whether the market is climbing a “wall of worry” based in part on policy promises that haven’t yet been delivered.
An Exciting Time for the Energy Sector
Oil is back in the news, with the price of benchmark West Texas Intermediate (WTI) crude roughly doubling from last year’s lows driven by steady demand and coordinated supply cuts by Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers.
French Election Result: It’s Not Yet a Done Deal
There's some clear blue water between the two candidates contesting the final round of the French presidential elections on May 7: Marine Le Pen and Emmanuel Macron. Here, David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, shares some thoughts on the potential market implications of the race.
The Case for Listed Infrastructure: Strengthening the Foundation for the Global Economy
The sorry state of US infrastructure was a major talking point during the 2016 US presidential election, and was seen as one of the few areas that could garner bipartisan political support. But certainly, the need for infrastructure is a global issue that can offer a bridge to economic growth, particularly in emerging markets. Here, the Franklin Real Asset Advisors team builds a case for investing in infrastructure-related securities
Sand Piles and Markets April 20, 2017
The US equity market has been climbing since 2009, and many investors are finding reasons to believe the ascent should continue this year.
Global Economic Perspective: April
Franklin Templeton Fixed Income Group talks monetary policy, European politics in the April Global Economic Perspective.
On a recent visit to Argentina, I was interested to see how things have changed under the leadership of a new administration—in many cases, due to constructive policy reforms.
Second Quarter Hedge-Fund Strategy Outlook
In their second-quarter (Q2) 2017 outlook, K2 Advisors’ Research and Portfolio Construction teams share the key market events they have an eye on.
Cutting Through the Political Noise for Opportunities in Europe
Amid the political uncertainty in Europe prompted by upcoming elections and the start of Brexit negotiations, another story is quietly playing out, involving improved economic and corporate conditions.
Can Strategic Beta Make You a Smarter Investor?
Many investors still have misconceptions about exchange-traded funds (ETFs), including the type of market exposure they are getting with traditional capitalization-weighted ETFs. Dr. Chandra Seethamraju, director of systematic modeling, Franklin Templeton Solutions, gives us the lowdown on the concept of “beta” within ETFs—specifically strategic beta—and how it can offer a smarter investment approach.
Brazil and Other Bright Spots in Latin America
I’ve just been on an extensive trip through Latin America, starting in Mexico and proceeding to Peru, Chile, Argentina and Brazil. Here, I offer a few highlights—including reasons for optimism.
An Investor’s View of the French Presidential Election
As far as most commentators are concerned, the first round of the French presidential elections, due to take place on April 23, will be a race to see who faces the far-right National Front leader Marine Le Pen in the run-off in May.
Beyond the Headlines: Finding Opportunities in Today’s Markets
With markets reacting in part to geopolitical events, it’s hard not to be distracted by news headlines. To help sift through some of the noise, several of our senior investment leaders recently participated in a roundtable discussion of the events shaping the global markets today, the implications for investors and where they see potential opportunities ahead.
Why Things Aren’t What They Used to Be in Emerging Markets
The prospect of stabilizing commodity prices and improving corporate earnings has helped rebuild investor interest in emerging markets over the past year. But returning investors may find the constituents of today’s emerging markets are very different from those of the past.
The Cutting Edge: Not Just for Tech Companies Anymore
The new US administration’s immigration policy may have angered some technology-sector executives, but the Trump administration has signaled an intention to put technology at the heart of its economic roadmap.
Does Dutch Election Result Signal an End to Europe’s Populist Surge?
Franklin Templeton Fixed Income Group’s David Zahn examines the issue of populism in Europe, including Dutch elections and a possible second Scottish referendum.
South Africa: Key Issues and Challenges
As I’ve previously written, I had the opportunity to visit South Africa recently and meet with a number of executives at companies there, as well as talk to people and observe various trends.
Why Fixed-Income Investors Shouldn’t Fret About Fed Tightening
Following the Federal Reserve’s decision to raise interest rates at its March policy meeting, Franklin Templeton Fixed Income Group CIO Chris Molumphy weighs in on why fixed-income investors shouldn’t fret.
Global Economic Perspective: March
In this month’s Global Economic Perspective, Franklin Templeton Fixed Income Group weighs in on the factors spurring the US Fed’s decision to raise rates, why the ECB’s Draghi is likely to resist calls to adopt a more hawkish line, and why the backdrop for emerging markets has improved.
South Korea’s Presidential Impeachment
South Korea’s constitutional court decided to uphold the parliament’s impeachment of President Park Geun-hye amid a corruption scandal that has plagued the president and her adviser, Choi Soon-sil.
Cracking the Code on Social Security Benefits
If you're like most working people, you've probably received a statement in the mail from the Social Security Administration listing your potential future benefits. Trying to figure out how Social Security arrived at those mysterious figures requires some detective work. Here, Gail Buckner, CFP, our personal retirement and financial planning strategist, attempts to crack the code. She discusses how your benefit is calculated and offers some strategies on how to maximize it.
South Africa’s Slow Transformation
I recently had the opportunity to visit South Africa, which has seen its fair share of challenges over the past few years.
The Current State of the US Utilities Sector
US equities have generally been supercharged in the wake of the presidential election, but the utilities sector’s relative performance has dimmed instead.
A Travel Transformation in Emerging Markets
I recently penned a blog on opportunities within leisure and entertainment in emerging markets, including the travel industry. With improved infrastructure and more access to reasonably priced flights, more travelers have been able to explore exotic locations they had previously only read about or seen on television.
K2 Advisors : Why We Like Activist Hedge Strategies
Given the unpredictability of today’s financial markets, many investors are looking to reduce the impact of market volatility on their portfolios. Hedge-fund strategies—a type of alternative investment strategy—may help by potentially offering additional diversification, new sources of return and reduced risk.
Global Economic Perspective: February
For all that political events and speculation about policy direction have dominated news cycles over recent months, the US economy’s key fundamentals have changed remarkably little, in our view. The backdrop appears to us to be constructive, as a healthy level of consumer spending has been increasingly reinforced by a recovery in corporate earnings and investment.
An Emerging-Market Evolution
The way investors think about emerging markets has been evolving—along with the markets themselves. One thing we at Templeton Emerging Markets Group emphasize is that one can’t consider emerging markets as one asset class; the opportunities are very differentiated between regions, countries and markets, with different fundamentals shaping them.
Art, Entertainment and Leisure in Asia
Happy Chinese New Year to all my friends and followers! There’s no question it’s a big holiday for leisure and entertainment. Last year, retail and dining expenditures for the Lunar New Year came in at 754 billion yuan ($US115 billion), according to China’s Ministry of Commerce.
Could the Rally in Global Equities Keep Rolling?
Although global equity markets have rallied recently, some investors may feel unsettled about the changes occurring in many parts of the world—and what those changes could mean for their portfolios.
The Sectors Most Likely to Cheer US Tax Reform
The financial markets seem to have high hopes for new business-friendly policies in the United States following Donald Trump’s inauguration as the country’s 45th president on January 20.
Don’t Underestimate the UK’s Brexit Negotiating Position
Earlier this month, David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, set out some thoughts on the political and economic landscape for Europe in 2017.
Europe’s Main Event: Economics vs. Politics
European equities have been in the tank for years, as the region has struggled with lackluster growth since the 2007-2008 financial crisis. But just as it appears that European stocks may be poised to benefit from higher global economic growth levels and an uptick in earnings, potential fallout from national elections...
Celebrating a 30-Year Anniversary
This month marks my 30-year anniversary with Templeton Emerging Markets Group! The opportunity to open up new emerging markets, learn about new industries, meet wonderful people around the world and most of all be part of the Templeton emerging-markets family has been a real blessing.
Latin America: The Rise and Fall of Populism
In the latest edition of “Global Macro Shifts,” the Templeton Global Macro team explores Latin America’s failed experiments with populism and the important lessons those experiences have for the developed world.
A Case Study in Retirement Planning: Why It Can Pay to Delay
If you are like many busy working people with many responsibilities and stresses, you probably have little time to think about retirement. But as the wise Ben Franklin once said, “If you fail to plan, you are planning to fail.”
China and Shadow Financing
For the first time ever, the president of China was in attendance at the World Economic Forum Annual Meeting in Davos this month.
European Bond Market: What Lies Beyond the Politics?
Although continued political uncertainty looks set to dominate the investment agenda for 2017, much as it did in 2016, David Zahn, head of European Fixed Income, Franklin Templeton Fixed Income Group, feels investors need to take heed of other themes that may be bubbling under the surface in the year ahead.
Emerging Markets Q4 2016 Recap: A Wobbly Quarter, but Reasons for Optimism
Templeton Emerging Markets Group has a wide investment universe to cover—tens of thousands of companies in markets on nearly every continent! While we are bottom-up investors, we also take into account big-picture context.
ETF Trends to Watch in 2017
The turn of the calendar to a new year brings new year’s resolutions—and predictions. While many market pundits are now making their prognostications for the year ahead, David Mann, head of Capital Markets, Global Exchange-Traded Funds (ETFs), doesn’t claim to have a crystal ball that will reveal where the market is headed next.
Driving a Case for Convertibles in 2017
When many people hear the word “convertible,” carefree driving, sunny roads and wind-blown hair probably come to mind. Franklin Equity Group Portfolio Manager Alan Muschott thinks of convertibles as something entirely different.
Politics, Policy Uncertainties Likely to Sway Markets in 2017
Franklin Equity Group's Coleen Barbeau explains why last year’s election-driven volatility will likely continue—and may be more significant—in 2017.
Politics, Policy Uncertainties Likely to Sway Markets in 2017
For fans of surprise endings, especially in political contests, 2016 was a banner year. Unexpected election outcomes swung global equity markets both up and down and continue to influence the outlook for many sectors and companies.
In just a few decades, Vietnam has undergone a dramatic transformation, from an agrarian society to one that has embraced the modern era. Its youthful population and growing middle class have helped drive solid growth—and opportunities for many global investors.
2017 US Growth Investing Outlook
With the US stock market roaring ahead to close 2016 on a high note, the question for many investors is whether the momentum can be sustained.
Global Economic Perspective: December
Emerging-Market Equity 2017 Outlook
What’s ahead for emerging markets in 2017? Stephen Dover, managing director and CIO of Templeton Emerging Markets Group and Franklin Local Asset Management, and Mark Mobius, executive chairman of Templeton Emerging Markets Group, present their emerging-market equity outlook.
In the Know: Fed Lifts Rates, but “Lower for Longer” Likely
The markets can finally put the US interest-rate debate to bed (at least for the time being) as the Federal Reserve lifted its benchmark short-term lending rate for the first time in a year.
Focusing on Fundamental Improvement
My colleague Carlos Hardenberg shares his perspective on the opportunities and challenges he sees in emerging markets today and as we head into 2017.
Finding the Positives from a Tumultuous Week in Europe
Developments in Europe, including the resignation of Italian Prime Minister Matteo Renzi and the shock decision of the European Central Bank to reduce the amount of its monthly bond-buying program next year, have contributed to a tumultuous week for investors.
When It Comes to Retirement, 70 Is a Magic Number
If you are approaching retirement, maximizing your potential income is likely on your mind, and it can pay to plan ahead.
Readers’ Questions Answered
While I can’t always respond to each of your questions directly, I do enjoy hearing from my readers and followers and value your feedback.
Why a Continued Rise in Gold Prices May Still Pan Out
In the first seven months of the year, gold prices regained some luster lost after a multi-year slump, buoyed by new financial risks and geopolitical developments.
There’s More to India Than Just the Growth Story
India boasts more than 5,000 different stocks spread across a wide range of sectors, making the Indian equity market a sweet shop for investors, beating even the United States in terms of the number of companies available to invest in.
Central Banks and Stock Markets: a BOJ Case Study
One of the most fascinating aspects of current markets around the world is the degree to which central banks appear to be influencing the movement of not only bond markets but also equity markets.
Global Economic Perspective: November
Franklin Templeton Fixed Income Group® offers its perspective on the global markets. In this Issue: Uncertainty Ahead of Trump Administration but Fundamentals Remain Constructive; Divergence in Monetary Policies Between World’s Leading Central Banks Likely to Remain Intact; and Eurozone Bond Yields Rise but ECB Likely to Adjust Rather Than Signal End of Quantitative Easing
Why Markets are More Cautious About the Next Potential Political Pitfall
Donald Trump’s victory in the US presidential election means that markets have been caught off guard by unpredicted outcomes in two-way political races twice already this year. As we enter the final weeks of campaigning ahead of the Italian constitutional referendum, David Zahn, head of European fixed income, Franklin Templeton Fixed Income Group, explains that markets appear to be taking a more cautious approach to the next wave of potential political pitfalls, including next year’s general elections in Austria, the Netherlands, France and Germany.
Counting the US Election Implications on the Global Markets
While the US election uncertainty may finally be behind us, whether and how pre-election rhetoric will ultimately be reflected in policy shifts remains unknown.
A Fresh Look at DOL and Retirement Issues Under Trump
While we don’t really know what’s to come in terms of financial and retirement-related policies on the horizon under the Trump administration...
Emerging Markets and a Trump Presidency: No Need to Panic
The US presidential election resulting in a victory for Donald Trump has many potential implications for markets around the world, including emerging markets. When it became clear that Trump would emerge the winner, stock markets echoed the shock many US voters felt. Emerging markets were particularly volatile.
Notes from the Trading Desk – US Election Special
Franklin Templeton's Asian and European trading desk teams evaluate the aftermath of the US election in a special edition of Notes from the Trading Desk.
Hasenstab: US Election Rhetoric vs. Realities
As the election results were confirmed late Tuesday night in the United States (around midday Wednesday in Asia), there was a pretty violent reaction in many markets and across asset classes and regions. Michael Hasenstab, CIO of Templeton Global Macro, opines on the drivers and meaning of today’s market twists and turns.
America Decides: A Vote for Change
The next 100 days are critical for the newly elected officials in the United States, and we will continue to gain clarity on many policy items over that timeframe. There is no doubt that this election, and outcome has challenged the status quo and we could see even small issues become larger should impasses persist.
Stock-Market Value Hunting—and a Potential Post-Election Outcome
When looking at various countries or regions where we invest, we consider emerging markets as representing a disproportionate amount of where equity value exists today after several years of underperformance relative to developed markets.
Risks, Opportunities and Adventures in Borneo
Borneo is the world’s third-largest island and its equatorial rainforest is home to many species of plants and animals, which attracts tourists from around the world. Borneo also boasts significant power resources, including hydroelectric power, coal and natural gas deposits; liquefied natural gas is a key export.
What’s Driving US, European Voter Resentment?
Voters in a democracy often respond more to perception than reality, particularly when it comes to issues of patriotism, pride and identity. It isn’t always just about the bottom line.
Helicopter Money: Pulling a Brick with a Rubber Band
You may have heard the term “helicopter money” bantered about in the press of late. Robert Christian, senior managing director and head of research, K2 Advisors, explains what this moniker means, why it has gotten some recent buzz and whether global central banks may be considering letting it fly.
Fixed Income Markets and the US Election: What Really Matters
In terms of US monetary policy, on balance we don’t think the election itself will materially impact the path of interest rates unless the economic fundamentals materially reversed. Additionally, the passage of election uncertainty should remove another potential objection to continuing on a gradual tightening path.
Smartphones and Software Keys to Realizing “Dot-Com Dreams”
We believe many of the unfulfilled dreams of the dot-com era are finally being realized as the convergence of hyper-connected consumers and increasingly sophisticated technology and software has allowed companies to provide services that seemed impossible even 10 years ago.
Thai People Mourn Loss of Their King
There are concerns that political differences could again re-emerge in Thailand that have in the past been destabilizing. However, in our view, the backdrop to a royal succession has improved drastically in recent years.
Emerging Markets Q3 Recap: Sentiment Remains Strong
Companies in the consumer-related sectors and information technology are particularly attractive to us in the current environment, especially as technology is becoming more integral and competitive in emerging markets.
Global Economic Perspective: October
While heartened by the bounce in oil prices after the multi-decade lows reached early in the year, any significant further rally in energy prices would seem to us to require a far more vibrant global economy. As the IMF’s (and the Fed’s) relatively subdued outlooks make clear, it is hard to anticipate such a scenario occurring anytime soon.
Mexico Entangled in US Election as Banxico Tightens
Regardless of statements about more restrictive trade, it will be very difficult if not impossible for US-Mexico trade to be destroyed since the links are too deep between the two countries.
US Election Implications for Europe: What Many Observers Are Missing
Global political uncertainly has been plaguing investors around the world for months. With the UK Brexit vote behind us, attention now turns to the US presidential election.