We’ve seen economic data in recent months moderate after record growth in the first half of 2021. While this moderating economic data is something we’re paying attention to, we see this as really a direct impact or result of the rise of COVID rates in the US, specifically the Delta variant. While we are paying attention to this, we do view this as much more of an economic pause than a broad-based pullback and we would expect economic growth to pick up in the second half of the year and into 2022.
We’re sensitive to rising valuations and we’ve become more selective in our approach, specifically focusing on high quality businesses with sustainable drivers of growth that may not be reflected in current valuations.
Many of these investments are levered to strong secular growth themes that we believe will deliver consistent growth throughout the market cycle.
As we move from an analog based world to a digital one, numerous investment opportunities are being created across all sectors, not just the technology sector.
In financials,1 the rise of many fintech companies and the growth of digital payments has really disrupted the traditional banking industry, creating new options for consumers. We view many of these fintech businesses as still being in the early days of the disruption.
In the health care sector,2 we’re finding new investment opportunities that are meeting the growing global demand for health care with innovation and technology. While biotech and genomics are showing tremendous promise with new treatments and cures, the medical device and technology industries are investing heavily in research and development to reimagine the health care system of the future.
During the pandemic, consumers were introduced to a tremendous number of new options on how to buy and sell goods, how to access healthcare, engage in home exercise or entertainment.
We believe that we will likely observe a big reshuffling of spending patterns in the years ahead, as consumers embrace many of these new options they discovered over the last year.
Another area of interest is industrials.3 The reshoring of the global supply chain is another major theme that we’re focused on. The COVID-19 pandemic exposed many weaknesses of the global supply chain, specifically in the areas of health care. We think that over the next few years, many of these industries, starting with health care but broadening out over time, look to reshore back to the United States.
De-urbanization is another theme on our radar. We’ve We are observing a shift in the way the millennial generation has chosen to live, away from a more urban-centered lifestyle to a one that is more suburban in shape. This trend will likely play out over the next 5-10 years and has significant implications to many industries.
This information is intended for US residents only.
To get insights from Franklin Templeton Investments delivered to your inbox, subscribe to the Beyond Bulls & Bears blog.
For timely investing tidbits, follow us on Twitter @FTI_US and on LinkedIn.
What Are the Risks?
Franklin Growth Opportunities Fund
All investments involve risks, including possible loss of principal. Growth stock prices reflect projections of future earnings or revenues, and can, therefore, fall dramatically if the company fails to meet those projections. To the extent the fund focuses on particular countries, regions, industries, sectors or types of investment from time to time, it may be subject to greater risks of adverse developments in such areas of focus than a fund that invests in a wider variety of countries, regions, industries, sectors or investments. Smaller, mid-sized and relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Historically, these securities have experienced more price volatility than larger company stocks, especially over the short-term. These and other risks are described more fully in the fund’s prospectus.
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial professional, call us at (800) DIAL BEN/342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.
Important Legal Information
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.
The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.
Any research and analysis contained in this material has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Data from third party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verified, validated or audited such data. Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. The mention of any individual securities should neither constitute nor be construed as a recommendation to purchase, hold or sell any securities, and the information provided regarding such individual securities (if any) is not a sufficient basis upon which to make an investment decision. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user.
Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as local laws and regulation permits. Please consult your own financial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction.
Issued in the U.S. by Franklin Distributors, LLC, One Franklin Parkway, San Mateo, California 94403-1906, (800) DIAL BEN/342-5236, franklintempleton.com – Franklin Distributors, LLC, member FINRA/SIPC, is the principal distributor of Franklin Templeton U.S. registered products, which are not FDIC insured; may lose value; and are not bank guaranteed and are available only in jurisdictions where an offer or solicitation of such products is permitted under applicable laws and regulation.
1. As of 6/30/21, the financials sector represented 6.80% of Franklin Growth Opportunities Fund. Portfolio holdings are subject to change without notice and may not represent current or future portfolio composition.
2. As of 6/30/21, the health care sector represented 15.99% of Franklin Growth Opportunities Fund. Portfolio holdings are subject to change without notice and may not represent current or future portfolio composition.
3. As of 6/30/21, the industrials sector represented 7.06% of Franklin Growth Opportunities Fund. Portfolio holdings are subject to change without notice and may not represent current or future portfolio composition.