Our investment teams share where they see investment opportunities across asset classes in our latest Global Investment Outlook. Is an economic slowdown expected in 2024? Diverse views are presented on interest rates and inflation, investment opportunities, risks, and potential surprises.
Uncover what our investment leaders are watching for in the year ahead.
Over the next few months, our investment teams will deliver their outlooks for 2024, covering fixed income, equities, multi-asset, alternative investing, ETFs and digital assets. Please bookmark this page and return periodically to see all the latest views.
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Higher yields lift all boats
The Franklin Templeton Investment Solutions team’s capital market expectations (CME) is designed to provide annualized return expectations over a longer-term horizon, typically viewed as 10 years.
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- Fixed Income
- Equity
- Multi-Asset
- Alternatives
- ETF
- Digital Assets
Fixed Income
Institute View
- Yields are attractive and a tilt to quality is favored at this stage of the economic cycle as interest rates are near peak levels, with inflation and economic growth softening.
- Investment-grade credit is favored as corporate balance sheets are strong and higher yields now would make longer-duration, high-quality corporate bonds attractive from a total return perspective.
- US municipal bond credit quality is particularly strong today as state and local budgets appear to be in good shape, and the current shortage of bond supply with rising demand has historically preceded strong performance.
- In our view, high-yield bonds face minimal refinancing risk until 2025, and the opportunities in the highest-rated issues remain attractive, particularly relative to equities.
Equity
Institute View
- A small number of high-performing companies continue to lead broad US indexes, but we believe the best future investment opportunities globally lie in a wide range of sectors that are attractively valued with strong secular growth stories.
- Stocks with strong cash flows that support dividends become attractive when economic and growth uncertainty increases, and these types of quality companies often have less cyclical exposure, which can in turn provide growth through all market cycles.
- International opportunities are increasing as a peaking US dollar and shifting geopolitics drive more regionalized trade patterns and reshoring creates tailwinds for particular countries and companies.
Multi-Asset
Institute View
- We favor a tilt toward fixed income over equities given current valuations and macroeconomic considerations.
- Within fixed income, we see the best valuations in investment-grade corporate bonds, US agency mortgage-backed securities, and municipal bonds.
- Within equities, our preferences would be small/mid- over large-cap, defensive over cyclical, and international over US stocks.
- Within alternatives, the greatest opportunities we see are in private credit, secondary private equity, and selected segments of private real estate.
Alternatives
Institute View
- Private credit
- As banks retrenched from lending to small- and middle-market companies, private credit has grown significantly and has proven to be a resilient source of financing. Potential borrower benefits of private financing include partnership with the lender, execution speed and efficiency, certainty of terms, flexibility of structuring and confidentiality.
- Private Real Estate
- While factors such as work from home are challenging commercial office space fundamentals, low vacancies and higher demand are appealing in sectors such as industrial warehouses, life sciences, self-storage and multi-family real estate.
- Private Equity
- While broad private equity faced challenges in 2023, the secondaries market provided a more robust liquidity option for sellers and opportunities to acquire high-quality assets at more advanced stages of their life cycle for buyers.
ETF
Digital Assets
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