CONTRIBUTORS
Wylie Tollette, CFA
Chief Investment Officer,
Franklin Templeton Investment Solutions
Introduction
The fifth annual Franklin Templeton Investment Solutions (FTIS) Investment Symposium was held on November 7. This live research-focused forum delved into the most pressing topics and economic trends facing investors today. This year’s topics included forward-looking views on artificial intelligence (AI), a potential new interest-rate regime, the alternative investments landscape, and asset-allocation views (current opportunities/potential bubbles).
The event was divided into four panels, which gave us the chance to ask the really big questions on key topics we believe will influence returns and risk over the next decade.
At times, there was agreement; often, there was spirited debate. The panels were:
- Goodbye COVID, Hello AI
- A Brave New World of Higher Rates
- Alternatives are Here to Stay
- Putting it All Together (Asset Allocation)
These conversations have significant practical applications; primarily, they help the FTIS Research Team form its long-term Capital Market Expectations, which are used as the basis of portfolio construction for clients and prospects. This written account represents the views expressed by our panelists.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal.
Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default.
Equity securities are subject to price fluctuation and possible loss of principal. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks.
Special risks are associated with investing in foreign securities, including risks associated with political and economic developments, trading practices, availability of information, limited markets and currency exchange rate fluctuations and policies; investments in emerging markets involve heightened risks related to the same factors. Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt. To the extent a strategy 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 strategy that invests in a wider variety of countries, regions, industries, sectors or investments. China may be subject to considerable degrees of economic, political and social instability. Investments in securities of Chinese issuers involve risks that are specific to China, including certain legal, regulatory, political and economic risks.
Real estate securities involve special risks, such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments affecting the sector.
To the extent the fund invests in alternative strategies, it may be exposed to potentially significant fluctuations in value.