SURF THE WAVE OF DIGITAL TRANSFORMATION

Are you thinking of investing in the technology sector or is the fear of market volatility holding you back?

Watch Jonathan Curtis, Portfolio Manager of Franklin Technology Fund, as he explains digital disruption and how he capitalises on the trend in an uncertain market environment.

3 REASONS TO INVEST IN TECHNOLOGY



1. STRONG ECONOMY

  • The US economy remains resilient and employment rate remains high.
  • Businesses are investing in automation and artificial intelligence to increase productivity.
  • Companies are transforming their businesses into digital-based models and technology solutions are the enablers to power this transformation process.


    2. BUY ON DIPS

    • Market gyrations are part and parcel of the economic cycle. Such market fluctuations present a window of opportunity to purchase strong technology companies that are priced at a discount to their intrinsic value.
    • Companies in all sectors are investing in technology to stay ahead of the digital disruptors in their markets. The firms selling the technology are the key beneficiaries of these investment inflows.
    • The trade war’s impact on the technology sector is primarily in the semiconductor space. Investment opportunities can be found among semiconductor equipment suppliers as China builds its own semiconductor capabilities in its bid to be independent from the US.



    3. REASONABLE VALUATIONS

    • The technology sector has been a strong performer in the recent years, and it will continue to grow as a result of the digital transformation megatrend.
    • Technology sector valuations (price-to-earnings ratio) are nowhere near the dotcom era peak and remain reasonable relative to growth potential1.
    • The technology sector is the third most profitable sector in the S&P 500 Index2.

    KEY DRIVERS OF TECHNOLOGY GROWTH

    Many industries will be digitally transformed by using data to better understand their customers and improve business processes.

    Investment opportunities are found in the six sub-themes supporting their pathway to digital transformation.

    Artificial Intelligence
    Enables data analysis using automated computing processes at scale

    Examples: Alibaba3

    Cloud Computing
    Supports companies in scaling their digital businesses globally at a low cost

    Example: Amazon3

    Financial Services (FinTech)
    Key to new commerce growth that allows consumers to transact digitally

    Examples: Tencent3

    Internet-of-Things (IoT)
    A rich source of consumer and business process data

    Example: Qualcomm3

    Software as a Service (SaaS)
    Provides enterprises with a more efficient way to attract new customers while scaling operations

    Examples: Salesforce3

    Digital Advertising
    An efficient way to understand and communicate with potential buyers
    Example: Shopify3



    As technology becomes more integrated into business processes and consumer behaviour, the sector has grown enormously.

    Capitalise on the growth themes in digital transformation with Franklin Technology Fund.

    CAPITALISING ON TECHNOLOGY SECTOR’S GROWTH
    WITH THE FRANKLIN TECHNOLOGY FUND

    1. TECHNOLOGY SHOULD BE A CORE INVESTMENT
     
    Technology firms are increasingly central to the economy and businesses. The sector is dominating the equity markets; eight out of the 10 most valuable companies are technology-related. The diversity of technology sub-sectors and the prevalence of technology in daily life make a strong argument for treating technology as a core element of investor portfolios.

    Most Valuable Companies by Market Capitalisation (USD billion)4

    80%
    are technology-related firms
    • Technology firms
    • Other
    2. MANAGED BY A SILICON VALLEY-BASED TEAM OF EXPERTS

    The team is located in the proximity of leading technology companies, research universities and VC firms.

    Tech Experts5

    Providing in-depth research in industries like robotics, technology, enterprise software and media devices.
    3. STRONG PERFORMANCE

    Franklin Technology Fund has outperformed its benchmark, peers and global equities over the 15-Year period, and has navigated through significant market events.

    Growth of US$1,000 Initial Investment (Before 5% Sales charge)6
    15-Year Period Ended 31 Aug 2019

    4. NOTABLE ACHIEVEMENTS7,8


    5 STARS

    Morningstar Rating 97% of the time since July 2016

    AWARD-WINING FUND

    Best Information Tech Equity Fund in the Singapore Lipper Fund Awards 2011, 2012, 2013, 2014, 2017, 2018 and 2019



     


    NEXT STEPS

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