A Brief Summary

According to a panel of asset management executives and managers who participated in a Franklin Templeton recent webinar, investing for the next five years involves different tactics than investing for immediate profits. Many of the participants who attended the webinar worked for Franklin Templeton's subsidiaries as portfolio managers.

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The panellists who participated in the webinar 'The Next Five: Stop Investing for 2022 and Start Investing for 2027', said the advisors and investors who focus on the long-term investment prospects would have to look at issues such as digital revolution, the influence of ESG, the impact of the political situation and others on every market segment.

Tracy Chen, portfolio manager of Brandywine Global Investment Management, a financial services business located in Philadelphia, said one of the largest market disruptors is society's transformation to a digital lifestyle.

“This is already a huge movement and some companies are going to be squeezed out,” Chen said. Investors should look at this market segment globally. “China has a big initiative to achieve self-sufficiency in 5G and artificial intelligence,” which will create investment opportunities. “European countries also want to lead the way in technology, which creates fierce competition.”

A global asset manager has a lot of opportunities to diversify digital investments, she added. “Asset managers would be remiss to focus just on the United States,” Chen said.

Investors should not overlook firms that offer the foundation for the digital transformation, according to Derek Deutsch, managing director and portfolio manager at ClearBridge Investments, a global equities manager located in New York City with $208 billion in assets under management.

“Software companies are more attractive to us than hardware companies for the most part,” Deutsch said. Companies that make the consumer discretionary spending segment possible will create investment opportunities. “It is not just the technology companies, but companies that are forward-looking that will create opportunities.”

Clarion Partners, a real estate and property investment corporation located in New York City, takes a different approach to the digital transition.

"Investors interested in real estate as an inflation hedge should consider how the digital transition has transformed how people live, play and work," said Tim Wang, managing director and head of investment research at Clarion Partners.