Franklin Templeton believes that AI-driven technology solutions will bring disruption to multiple industries, spurring new growth in the coming days.
Jonathan Curtis, senior vice president and director of portfolio management at Franklin Equity Group, said the fund believes artificial intelligence is a key pillar of digital transformation, which is driving major disruption across industries while stimulating new growth. , companies have the opportunity to increase productivity, reduce costs, and ultimately become more competitive with this generative AI.
He added that other investment areas the fund firm is focusing on are healthcare, which is supported by decades-long demand trends from an aging global population, and energy, as the world shifts to more renewable, sustainable energy. platform.
In the second half of 2023, as investors regain confidence that the Fed’s rate hike cycle is nearing its end, and as long as the economic picture shows that fundamental risks to earnings may be lower than feared, there is potential for greater breadth in the market Curtis said in Interacting with the media, he said there were signs of stabilization.
Active management allows Franklin Templeton to identify high-quality companies that can become market leaders, thereby pursuing opportunities that can deliver positive long-term results.
The fund focuses on key long-term themes such as digital transformation and healthcare innovation, investing in established and emerging growth companies across a variety of sectors. In terms of portfolio positioning, he said the focus is no longer on absolute growth but on profitability, margins, cash flow and revenue/earnings visibility.
“We note the potential lagging impact of the Fed’s rate hikes on economic growth, but we remain cautiously optimistic about the sustainability of the strong U.S. economy,” he said.
Broadly speaking, funds continue to see consumers and businesses adapt to changing economic conditions, particularly in highly cyclical areas of the market. It believes idiosyncratic factors will drive returns this year, as opposed to macro factors, which can lead to higher asset correlations.