When Europe’s debt disease spread to Cyprus, accompanied by bank runs and public unrest, some doubted the European Central Bank’s (ECB) ability to contain the contagion. And, even more recently, Slovenia turned up sick, warning of escalating debt problems and faltering banks. But with the setbacks have come some surprising steps forward, too, including progress in Italy, which recently formed a new coalition government.
Par Rostom, portfolio manager of Franklin International Growth Fund, shrugs off the latest bits of bad news and sees the setbacks as part of Europe’s long-term healing process as countries and companies shed their debt, as austerity programs take effect, and as the ECB continues to take measures like interest rate reductions and pumping money – more than €1 trillion so far – into banks via cheap three-year loans. Read more…
Gold bugs have been bugging out over a sharp decline in the price of gold, which hit a two-year low in April. Many gold-related stocks felt the sting. Steve Land, CFA, portfolio manager and research analyst with Franklin Equity Group©, thinks gold-related stocks could be oversold, and that there are still compelling reasons to own them. Read more…
It’s easy to get excited about a particular market when everyone else seems to be piling in, and the headlines are screaming of new record highs. That has certainly been the case with U.S. equities of late. While many investors are paddling to catch the wave before it crests, it takes a great degree of fortitude and patience to wait for the next one to form in places that don’t look particularly thrilling right now. Lisa Myers, co-manager of Templeton Global Balanced Fund, is searching for equity values across the pond in Europe, where many investors don’t dare dip their toes.
Growth in the euro area has been rather bleak. The International Monetary Fund recently updated its forecast for real GDP growth to contract about 0.25% this year, noting a recovery could be slower than expected because of “adjustment fatigue, weak balance sheets, broken credit channels in the periphery, and insufficient progress toward stronger economic and monetary union.” However, Myers says her team’s stock selection process boils down to a long-term perspective, a contrarian approach, and value—of which Europe is providing plenty of right now. Read more…
Norm Boersma didn’t originally plan to be where he is today. But sometimes, you just have to roll with the punches. Hard work and mettle have led to his success as chief investment officer of Templeton Global Equity Group and as lead portfolio manager for Templeton Growth Fund. We had the opportunity to sit down with Boersma to discuss how he joined the organization, and the lessons he’s learned along the way. Read more…
Greece’s tale of financial woe may well go down as a modern Greek tragedy, with people in power falling prey to a tragic flaw which brings about their catastrophic reversal of fortune. It’s all quite dramatic and dire, but if the real life Greek financial system stays true to the classical formula, the conclusion means recognition of that tragic flaw and potential course correction. For those hardy and/or contrarian souls who suspect opportunity may be sprouting from Greece’s great mess, this would be good news. Read more…
While governments worldwide continue to struggle with debt and budget issues, for the most part, corporations have turned lemons into lemonade and have become lean and mean. While not without risk, corporate credit actually looks to be in fairly good shape, according to Eric Takaha who, as senior vice president and portfolio manager of Franklin Strategic Income Fund spends a good deal of time analyzing the space. Read more…
The U.S. financial crisis in 2008-2009 left many investors with a reluctance to take investment risks, particularly those related to any of the world’s wilted housing markets. However, as your local real estate agent would likely tell you, the market in one location can be vastly different than it is in another. Wilson Magee, co-manager of Franklin Global Real Estate Fund would agree that the adage “location, location, location” applies not only to individual home buyers and sellers, but to investors seeking opportunities in the commercial real estate sector, too. While real estate went bust in some areas of the world, it continues to boom in others. For that reason and others, Magee believes global Real Estate Investment Trusts (REITs) are worth a look. Read more…
What a difference a year makes! Early in 2012, the eurozone appeared to be on life support and market prognosticators were busy weighing the odds of a breakup. At the time, the proposition that European stocks would actually post a positive performance for the year seemed almost absurd, but of course that’s just the sort of fertile environment value-hunters such as Philippe Brugere-Trelat like. Brugere-Trelat, EVP of Mutual Series and portfolio manager of Mutual European Fund and Mutual International Fund, found select opportunities in Europe that were ripe for the picking. While the debt crisis in Europe is far from over, he thinks the picture looks brighter for Europe this year.
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The financial markets may have let out a collective sigh of relief on January 1 when U.S. politicians managed to avoid falling off the fiscal cliff, but the fact is the fundamental issue plaguing the U.S. still hasn’t been addressed – mounting debt. As a result, Dr. Michael Hasenstab, co-director of the International Bond Department and portfolio manager for the Templeton Global Bond Fund, says he simply doesn’t see much value in U.S. Treasuries right now. He does see it elsewhere in the world, though, including Ireland and select emerging markets where fiscal houses appear in much better order. Read more…
For the next installment of our “New Year’s Vantage Point” blog series, today we hear from Mark Mobius, executive chairman of Templeton Emerging Markets Group.
TEMPLETON EMERGING MARKETS GROUP
Mark Mobius, Ph.D., Executive Chairman
We are generally positive on the long-term prospects for emerging and frontier market equities. In our opinion, the economic background for many emerging and frontier markets is stronger than that prevailing in many developed markets. Although estimates for emerging-market economic growth in 2012 have fallen in recent months, they generally remain well in excess of those for developed markets. Moreover, unlike developed markets, many emerging and frontier markets still have ample room for fiscal and monetary stimulus. Although weak growth in developed markets could be transmitted to emerging markets, notably through declines in world trade, this influence could continue to be offset in emerging markets by higher investment spending and increased domestic demand. Read more…
