PowerPoint Presentation · 9/30/2020 · Franklin Templeton Multi-Asset Solutions is a business...
Transcript of PowerPoint Presentation · 9/30/2020 · Franklin Templeton Multi-Asset Solutions is a business...
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$18,988
$16,464
$18,012
$15,109
$5,000
$10,000
$15,000
$20,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Equity Market Drawdown Franklin Quotential Bal Growth Port F S&P/TSX Composite TR
FTSE Canada Universe Bond CPI +2%
Source: Franklin Templeton Capital Market Insights Group, MSCI, Bloomberg, Macrobond. Important data provider notices and terms available at www.franklintempletondatasources.com
$29,732
$29,733
$25,864
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020
Index 60/40 MSCI ACWI Bloomberg Barclays Global Aggregate
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Global 3 month Benchmark Government Yields
June 1990 – August 2020
-5.0
0.0
5.0
10.0
15.0
Australia Brazil Canada China France Germany Japan Russia Switzerland UK US
Yield Range (30 Year) Mean [Mean -30y] Last
-3.0
0.0
3.0
6.0
9.0
12.0
15.0
18.0
Australia Brazil Canada China France Germany Japan Russia Switzerland UK US
Yield Range (30 Year) Mean [Mean -30y] Last
Source: Franklin Templeton Capital Market Insights Group, Macrobond. Important data provider notices and terms available at www.franklintempletondatasources.com
Global 10 Year Benchmark Government Yields
June 1990 – August 2020
Source: Franklin Templeton Capital Market Insights Group, Macrobond. Important data provider notices and terms available at www.franklintempletondatasources.com
0
2
4
6
8
10
12
14
16
18
1950 1957 1964 1971 1978 1985 1992 1999 2006 2013 2020
% Y
ield
Source: Franklin Templeton Capital Market Insights Group, Macrobond, Fed, as of August 31, 2020. Important data provider notices and terms available at
www.franklintempletondatasources.com
Note: Not all of the alternatives investments are equity-like.
Source: Calculations by the Franklin Templeton Capital Market Insights Group using data sourced from the U.S. Board of Governors of the Federal Reserve System, Financial
Accounts of the Unite States, and Pew Analysis of State Financial Reports, as of December 31, 2017.
0
10
20
30
40
50
60
70
80
90
100
1954 1964 1974 1984 1994 2004 2014 2015 2016 2017
Perc
enta
ge A
llocation (
%)
Equity & Alternatives Fixed Income and Cash
-100
-80
-60
-40
-20
0
20
40
60
80
1001
93
6
193
8
194
0
194
2
194
4
194
6
194
8
195
0
195
2
195
4
195
6
195
8
196
0
196
2
196
4
196
6
196
8
197
0
197
2
197
4
197
6
197
8
198
0
198
2
198
4
198
6
198
8
199
0
199
2
199
4
199
6
199
8
200
0
200
2
200
4
200
6
200
8
201
0
201
2
201
4
201
6
201
8
Corr
ela
tion (
%)
Source: Franklin Templeton Capital Market Insights Group, Macrobond, Morningstar Research Inc., S&P Dow Jones, Federal Reserve,
IA SBBI LT Government TR Index = Ibbotson Associates Stocks, Bonds, Bills and Inflation Long-Term Government Total Return Index, as of December 31, 2019.
-0.5
0
0.5
1
1.5
2
2.5
May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Per
cent
United States Canada Euro Area 19 Germany France United Kingdom Japan South Korea
Source: Franklin Templeton Capital Market Insights Group, OECD, Macrobond, Important data provider notices and terms available at www.franklintempletondatasources.com
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-30
-20
-10
0
10
20
30
May-05 Apr-07 Mar-09 Feb-11 Jan-13 Dec-14 Nov-16 Oct-18 Sep-20
Year
over
Year
Change (
%)
M2 Velocity M2 Money Supply
0.15 0.23
1.36 1.48 1.59
1.05 1.130.80 0.63 0.69 0.70 0.55
1.34 1.18
5.39
0
1
2
3
4
5
6
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
US
D, T
rillio
ns
Unites States, Financing, Marketable Borrowing, U.S. Department of Treasury, Marketable Borrowing Estimates, Estimate, USD
During the July –
September 2020
quarter. Treasury
expects to borrow
$947 billion in
privately-held net
marketable debt
During the October
– December 2020
quarter, Treasury
expects to borrow
$1.216 trillion in
privately-held net
marketable debt.
-4
-2
0
2
4
6
8
10
1998 2000 2002 2004 2007 2009 2011 2013 2016 2018 2020
Pro
port
ion
of G
loba
l GD
P (
%)
PBoC ECB BoJ BoE FED Other CB:s Total
Source: Franklin Templeton Capital Market Insights Group, RBA, BCB, StatCan, Central Bank of Denmark (Denmark's Nationalbank), ECB, Central Bank of Iceland, RBI, BOJ, BNM, BANXII. Important data provider notices and terms available at www.franklintempletondatasources.com
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Hypothetical Scenario Y/C Shift Full Period*3yr Avg Annual
Return**
5yr Avg Annual
Return**
7yr Avg Annual
Return**
Rates marginally higher,
slow-flation
+ 30bps
(10yr finish 1%)-0.2% 0.2% 0.4%
Rates higher, inflation normalizes+ 180bps
(10yr finish 2.50%)-4.5% -2.1% -1.0%
Rates much higher, robust
inflation, oversupply concerns
+ 330bps
(10yr finish 4.00%)-8.9% -4.4% -2.5%
Exhibit 10: Rising yield scenarios
Source: Franklin Templeton.Barra *Assumes starting yield of 0.70% ** Annualized return with rebalancing annually, as of September 30, 2020
Hypothetical Scenario10yr Level at Market
Crash Start
Price Return with
Fall to 0.50%
Price Return with
Fall to 0.00%
Price Return with
Fall to -0.50%
Low starting point for
10yr yield10yr at 1% 4.9% 9.7% 14.6%
Moderate starting point for
10yr yields10yr at 2.50% 19.4% 24.3% 29.1%
High starting point for
10yr yields10yr at 4.00% 34.0% 38.8% 43.7%
Source: Barra, as of September 30, 2020
Exhibit 11: Falling yield scenarios
Source: Franklin Templeton Multi-Asset Solutions, data updated on an annual basis, table based on most current data available
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.01
99
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
Retu
rn %
60/40 Equity Market Drawdowns MSCI ACWI GR USD
Source: Franklin Templeton Capital Market Insights Group, Macrobond
-60
-50
-40
-30
-20
-10
0
10
20
30
9/1/2000 -10/9/2002
10/9/2007 -3/9/2009
4/23/2010 -7/2/2010
4/29/2011 -10/3/2011
7/20/2015 -8/25/2015
11/3/2015 -2/11/2016
1/26/2018 -2/8/2018
9/20/2018 -12/24/2018
2/19/2020 -3/23/2020
Perc
ent
US Equities US Gov Bonds
Source: Franklin Templeton Capital Market Insights Group, SPDJI, Bloomberg, Macrobond. Important data provider notices and terms available at
www.franklintempletondatasources.com
Source: Franklin Templeton Capital Market Insights Group, Macrobond, BUBA, ECB, BoC. Opinions expressed are those of FTMAS and subject to change without
notice. Important data provider notices and terms available at www.franklintempletondatasources.com, as of September 30, 2020
-1
-0.5
0
0.5
1
1.5
2
0 5 10 15 20 25 30
Per
cent
Years
United States Japan Euro Australia Canada
Bond Market Region10 year
Starting Yield
Price Return with
ending level of 0.50%
Price Return with
ending level of 0.00%
Price Return with
ending level of -0.50%
Australia 0.89% 3.4% 7.8% 12.1%
US 0.69% 1.8% 6.7% 11.5%
Canada 0.60% 0.9% 5.5% 10.1%
UK 0.23% -2.3% 2.0% 6.3%
Japan 0.04% -4.5% 0.4% 5.3%
Germany -0.43% -9.4% -4.3% 0.7%
Source: Barra, as of September 30, 2020
High Growth
High Inflation
Real Assets; Real Estate,
Timberland, Farmland, Energy
Low or Falling Growth
High or Rising Inflation
Inflation-Linked Bonds;
Commodities; Infrastructure
High Growth
Low Inflation
Equity
Corporate Debt
Low Growth
Low Inflation or Deflation
Cash
Government Bonds
Low Growth Economic Growth High Growth
Lo
w
Gro
wth
Lo
w
Gro
wth
Lo
w
Gro
wth
Estate
Planning
Investment
and Risk
Management
Investment
Planning
RIS
K M
AN
AG
EM
EN
T
PLA
NN
ING
AN
D IIN
VE
ST
ME
NT
S
Retirement
Planning
Goal
Setting
Cash Flow
Analysis
Education
Planning
Tax
Optimization
Health
Care
Critical
Insurance
Disability
Insurance
Life
Insurance
Long-Term
Care
Investor
Advisor
Investors who work with an
advisor accumulate 270% more
assets after 15 years than
investors who go it alone
Source: CIRANO, “An Economic Analysis of Value of Advice in Canada,” 2012
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IMPORTANT LEGAL INFORMATION
The material is intended to be of general interest only and should not be construed as investment advice, recommendation or solicitation to buy, sell, hold
any security, or adopt any investment strategy. It does not constitute legal or tax advice.
The views expressed are those of the author and the comments, opinions and analyses are rendered as of August 4, 2020 and may change without notice.
The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All
investments involve risks, including possible loss of principal.
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. 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 contact for further information on availability of
products and services in your jurisdiction.
Franklin Templeton Multi-Asset Solutions is a business name used by Fiduciary Trust Company of Canada.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus or
fund facts document before investing. The indicated rates of return are historical annual compounded total returns including changes in unit value and
reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security
holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. The
portfolio manager for a Fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the top 10
holdings list. Fund AUM reported may include fund-on-fund holdings, and assets are therefore reflected in both the top fund and underlying fund AUM.