Why There’s Never Been a Better Time to Invest in Innovation
Franklin DynaTech Fund is celebrating its 50th anniversary this year. To mark the occasion, we caught up with Franklin Equity Group Vice President Matt Moberg, portfolio manager of the fund. He explains why he thinks we are in the middle of a period of unprecedented innovation where five technology-driven themes are starting to disrupt various industries.
Since inception, Franklin DynaTech Fund’s broad mandate has been the same: investing in companies whose innovative products and services have stimulated change or progress.
Although “tech” is in the Franklin DynaTech Fund’s name, we’ve always recognized that the influence of technology stretches across more than just a single sector. In the early days, the fund invested in computer manufacturers as well as in growth industries like convalescent homes, oceanography and pollution control.
Now, more than ever, we see innovation as the main driving force behind value creation in the global economy. As growth-oriented investors, we believe one must invest in innovation across industries to have the potential to outperform the market.
A Period of Unprecedented Innovation
In our view, we are in the middle of a period of unprecedented innovation where many ideas are evolving at the same time and are being adopted faster than initially anticipated. It reminds us of a period in the late 1800s. Back then, the harnessing of electricity and the invention of the telephone and internal combustible engine spurred growth across industries.
These days, we are particularly excited about the prospects for five technologically enabled themes that are starting to disrupt five different industries:
- robotics (industrials)
- genome sequencing (health care)
- energy storage (energy)
- next-generation internet1 (technology) and
- blockchain and virtual currencies/payments (finance).
Investing for the Future
Some of the themes listed above, like robotics, are currently investable. Robotics are changing the role of the human workforce to improve productivity and minimize production costs on the factory floor.