Volatility/Downside Protection

U.S. stocks typically post their best returns in the final quarter of the year. Our review of S&P 500 performance since the index’s inception in 1957 found an average Q4 uptick of 4%. (Q1 was next best at an average of 2%.)

Active management in ETFs are gaining market share in 2023, as leading managers bring their best ideas into the ETF industry.

Gilt prices have been struggling this past year due to surging inflation and interest-rate increases. David Zahn, Franklin Templeton Fixed Income’s Head of European Fixed Income, shares his outlook for the UK economy and why he thinks now is a good time to consider investing in gilts.

Intermission is over. Today we resume my series on the global cycle theories that, probably not by coincidence, all point to major change unfolding in the next few years. Finishing it may take some time since I keep finding new material.

Anyone who even casually pays attention to the financial media has likely become familiar with the current state of inflation as well as how high interest rates have risen over the past ~2 years.

Like any recovering reporter, I like to keep tabs on my old beats, and the marijuana ETF space never disappoints. Or, perhaps more accurately, it never stops disappointing.

Quarterly commentary giving an overview of the markets and the importance of having and implementing a strategy when investing in the markets.

Monetary tightening still continues in the form of quantitative tightening, bringing potential volatility, earnings pressures, and lackluster performance to stock markets.

I’ve been writing financial newsletters for 15 years. I have seen a few cycles. There have been good times and bad times, thrills and spills.

In our latest Quarterly Letter, Ben Inker and John Pease discuss the new economic regime, how investors can prepare for a recession, and the merits of combining high quality and cheap assets in today’s environment.

Historically, government shutdowns have not caused a major reaction in the markets. But shutdowns can increase market volatility, and an extended shutdown could have an impact on the overall economy.

While September has been a bit sloppy so far, will further weakness in October weigh on investor sentiment before the seasonally strong period begins?

The Fed sent a strong signal that interest rates will remain higher for longer, as our Franklin Templeton Fixed Income CIO Sonal Desai has long predicted. The Fed also started to acknowledge that the natural real rate of interest is higher than it thought.

Private infrastructure offers unique investment characteristics and potential diversification benefits for portfolio construction.

Investors have been increasingly allocating to various alternative investments. However, I don't see them as distinct assets deserving of allocations. As I discuss in my article below, I consider alternatives investment styles and as optional for portfolios as taste is for nutrition.

In many ways, 2023 continues to be the mirror image of 2022, with the most volatile assets being some of the best performers for much of the year.

Ultra high net worth investors have been using direct indexing to reduce their annual tax bill for years. But thanks to breakthroughs in technology and the ability to buy fractional shares, direct indexing has become more accessible.

Today, in a shock decision, the Bank of England (BoE) left its policy rate at 5.25% by the tightest possible majority vote of 5-4. All but one of 65 economists polled by Reuters had predicted that the BoE would raise the rate to 5.5%.

A balanced portfolio needs assets with strong return potential and those that may provide downside mitigation. We believe direct lending can deliver both—a potentially valuable feature, particularly in today’s uncertain market.

We started RBA in 2009 primarily because we thought the US stock market was entering one of the biggest bull markets of our careers. However, most investors did not agree with our bullishness. Now, risk aversion seems a thing of the past.

Investment-grade credit is currently offering impressive yields, with relatively less risk than other fixed income sectors, according to Josh Lohmeier of Franklin Templeton Fixed Income. He makes a case for investing in the space today.

When it comes to sheer equities performance over the last 30 years, there’s no denying the United States compared to the rest of the world. However, that could be changing according to one hedge fund manager.

Many of the speakers and attendees were bullish on the physical metal, pointing to gold’s resilience in the face of a very strong U.S. dollar and multiyear-high yields.

Artificial intelligence (AI) is widely viewed as the fuel for the rocket known as growth and technology stocks in 2023. While there is truth to that notion, there’s more to the story. Including the “magnificent seven” cadre of mega-cap growth names that are powering the market higher this year.

The Federal Reserve weighs the data while investors wonder: Is the rate-hike cycle over?

While some stocks may seem expensive, there are areas of opportunity that feature attractive valuations and growth catalysts, according to the Franklin Templeton Investment Solutions team.

Given concentration risk, understanding what a strategy and portfolio owns is more important than ever in current markets.

The September Federal Reserve meeting provided few surprises, but ongoing uncertainty about the Fed's next move may mean more volatility ahead.

In State Street Global Advisors’ recent Gold ETF Impact Study, the firm reported that “36% of surveyed investors don’t invest in gold because they don’t know enough about the ways that they can invest in gold.”

The biggest growth companies continue to increase their concentration in major equity indexes this year. It’s not surprising that investors are starting to rethink their exposure to large-caps, given concentration risk and ongoing market uncertainty.

Thematic ETFs have come a long way since they made their full debut in the ETF ecosystem.

Just about 10 “mega-cap” firms have driven more than 80% of the S&P 500’s growth in 2023. For some, that’s proven to be a source of robust returns, but that statistic also means heightened concentration risk for everyone.

Broad-based dividend strategies haven’t performed very well in 2023. But panelists at VettaFi’s Equity Symposium argued that there is value in dividend ETFs — investors just need to know where to look.

Inverted curves (when the gold line goes below the red line meaning that short maturity yields are higher compared to longer maturity yields) have preceded recessions.

Given the uncertainty over a recession, there are other incremental steps that investors may want to consider instead. These include making adjustments to a portfolio’s market beta and credit exposure.

A return to the Great Moderation Era looks unlikely, which might lead to an increasingly volatile—and somewhat unfamiliar—inflationary, economic, and geopolitical landscape.

In arguably quiet fashion, active managers are performing admirably in 2023. An impressive percentage of active equity and fixed income funds beat their benchmarks in the first half of the year.

Celebrating an exciting milestone: Franklin Income Fund turns 75. Learn more about this flagship strategy and read some fun facts from back in 1948.