- Disruption is happening across all asset classes. The current investment landscape is being shaped by forces that are very different than what we’ve seen in the past 40 years. Some of these forces include geopolitical upheaval, the widening mandates of central banks, wider availability of alternative investments and the potential for blockchain to disrupt old asset classes and create new ones.
- Democratization and innovation are the future of asset management. Portfolios will include a wider range of asset classes, including private investments and the tokenization of a broad range of assets. Asset managers should build an ecosystem of solutions for clients that includes both a wider range of asset classes and innovative delivery mechanisms.
- All roads lead to sustainability. The fiduciary duty of asset managers may extend to engaging with companies and governments on the importance of sustainable investments that also can lead to economic growth.
- China and the United States remain center stage. The key to global investing will remain focused on China and the United States and the relationship between them. Their relationship is evolving to be more competitive rather than collaborative, which will have wide-ranging geopolitical and investment ramifications.
- Is the past really prelude? Historical cycles have often been relied upon to better predict the future, but the past may not actually be a good predictor. Look for patterns rather than cycles. Be prepared for the unexpected.
- Adaptability, flexibility, and creativity will be necessary to achieve alpha. Alpha may be redefined from being based on outperforming benchmarks to returns achieved through superior idea generation focused on better optimizing specific client objectives.
We live in exciting times with many dangers and opportunities. Stay tuned as the Institute will explore these issues in greater detail.
What are the risks?
All investments involve risks, including possible loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount invested.
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.