The firm favors US, Japan, and emerging markets, citing AI-driven growth and resilient corporate profits over inflation risks.
Franklin Templeton reaffirmed its bullish stance on equities, prioritizing strong corporate earnings and AI-driven market exposure over geopolitical and inflation concerns. The firm’s strategy leans into US, Japan, and emerging markets, where technology and growth outlooks remain robust, while underweighting regions more sensitive to commodity swings, such as Europe and Australia.
Recent market volatility has eased stretched valuations in technology sectors, improving the setup for further gains, according to the firm. This view contrasts with broader caution around Federal Reserve policy and sticky inflation, which have dominated investor sentiment this week.
The firm’s preference for AI-linked markets aligns with its bet on sustained outperformance in sectors tied to technology buildout. It also sees international duration as relatively attractive, though equities remain the primary focus.