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Strategy Overview

Founded in 1968, the strategy has a proven investment process spanning more than fifty years focusing on "Dynamic Technology" and innovation.

The portfolio managers and investment team are in Silicon Valley, California—at the center of a network of industry, finance, academic and other contacts dedicated to world-leading innovation.

Access to the US Market

The strategy can invest in companies located anywhere in the world but has traditionally sourced a substantial part of its portfolio from companies located in the United States. We consider the strategy to be a diversified U.S. Growth Equity strategy.

High-Growth Positioning

The portfolio is often distinguished by higher estimated long-term earnings growth relative to major U.S. equity benchmarks, aiming to provide exposure to pockets of growth and dynamic technology that the index may not.

Thematic Exposure

Currently, we have identified five innovation platforms to anchor our portfolio: Disruptive Commerce, Genomic Advancements, Intelligent Machines, New Finance and Exponential Data. We seek to look beyond macroeconomic indicators and short-term company fundamentals, and instead harness the potential wealth creation power of these innovations and others over a long-term investment horizon.

Our Philosophy

We strive to own generational companies and hold them for the long term. We believe:

  • Innovation drives long-term wealth creation

  • Investing in innovation demands active management

  • Innovation occurs in all parts of the economy

Examples of Developing Innovation Platforms1

Disruptive Commerce

  • General Commerce

  • Media

  • The Sharing Economy

  • Verticals:
    Travel, Autos, Real Estate, etc.

Genomic Advancements

  • Sequencers & Equipment

  • Diagnostics

  • Gene Silencing or Muting

  • Gene Editing

  • Agriculture

Intelligent Machines

  • Robotics

  • 3D Printing

  • Internet of Things

  • Automated Driving

  • Drones

  • Healthcare Implantibles

New Finance

  • ePayments

  • Exchanges

  • Blockchain

  • Virtual Currencies

  • Distributed Lending

  • Alternative Data

Exponential Data

  • Internet of Things: Machine2Machine Learning

  • Cloud Computing

  • Edge Computing

  • Data Analysis

  • Augmented & Virtual Reality

Investment Process

Idea Generation Adapted to Innovation Focus

  • Run weekly screens that focus on finding companies that may be benefiting from change, dynamic technologies and innovation
  • Perform fundamental analysis, leverage our deep bench of experienced analysts to evaluate any company benefiting from change
  • Read and continuously learn and act as students of change, invention, themes, and the creative process

Innovation-Oriented Research

  • Employ bottom-up, fundamental research to identify compelling opportunities that meet our innovation/sustainable growth profile
  • Investment team located near the heart of Silicon Valley

Flexible and Opportunistic Portfolio Construction

  • Build a diverse portfolio according to end-markets, not formal sector classifications
  • Hold positions for entire secular cycle of growth to maximize value
  • Start with small position sizes to mitigate risk

Sell Discipline Tailored to Innovation Universe

  • Sell discipline seeks to manage risk and reduce the downside
  • Well-defined sell criteria for securities with meaningful absolute or relative price deterioration

This is a general depiction of the investment team's methodology and may not reflect the exact investment process for any particular strategy.

Management Team

The Franklin Innovation strategy is managed by the Franklin Equity Group. The Franklin Equity Group brings together more than six decades of investment experience offering in-depth expertise in managing growth, value, core and convertible equity strategies that cover global, regional and sector specialties. We believe that attractive risk-adjusted returns can be achieved over time by using a team-oriented collaborative approach and disciplined, bottom-up fundamental research.

Matthew J. Moberg

Senior Vice President, Portfolio Manager

Resources and Related Strategies

Contact Us

Please connect with us to learn more about our investment capabilities and how we can help meet your investing needs.