The multi-decade investment horizon strategy meets client requirements for sustainable long-term returns. Three long-term mega trends of Demographic Changes, the Future of Technology, and Resource Scarcity guide the team’s proprietary fundamental research and portfolio construction.
Franklin Global Long-Term Unconstrained
Strategy Overview
The Franklin Global Long-Term Unconstrained (GLTU) strategy invests in 20-40 quality growth companies and aims to provide long-term growth over a 5-10-year investment horizon.
Quality growth companies have hard to replicate competitive advantages as defined by low disruption risk, pricing power, strong ESG credentials and high management quality, and we believe can deliver long-term growth through their compounding potential.
We apply proprietary fundamental research to identify high quality companies that have been mis-priced by the market yet have sustainable growth potential. We take a concentrated, flexible approach to investing and consider portfolio construction with equal importance to the research process. We seek to manage risk on an absolute basis and invest without reference to any specific index.
Mega trends identify long-term structural growth
Rigorous, proprietary systematic and fundamental research
Using a stringent, repeatable investment process, we seek to find undervalued, quality growth companies offering high and sustainable returns on invested capital. We systematically risk assess a company against four categories: Industry, company, governance and sustainability, and portfolio risks.
Differentiated portfolio construction to manage risk and harness growth potential
The strategy offers diversification from index-based strategies. Companies are selected for their growth potential from diverse geographic revenues, maturities and exposure to long-term investment themes – not country or sector weightings. This aids the portfolio’s diversity, risk management and potential capture of long-term growth.
Our Philosophy
Our investment philosophy is founded on a belief that the market is myopic and fades returns of quality companies too fast. Our proprietary fundamental research framework is able to identify these companies that are undervalued due to market inefficiencies to find the best investment ideas. Combining this approach with active stock picking is how we seek excess returns from stock alpha over the long-term for our clients.
Our Investment Process
Our investment process is designed to exploit inefficiencies inherent in the market by identifying high quality businesses with sustainable growth at attractive valuations. We use a systematic three-step process of idea generation, in-depth fundamental research and portfolio construction to build conviction at every stage, resulting in a diversified and balanced portfolio.
- Idea generation. We use a proprietary screening process to identify quality growth companies that can generate sustained profits, demonstrated by an ability to consistently generate a Return on Invested Capital (ROIC) in excess of their Weighted Average Cost of Capital (WACC).
- In-depth fundamental research. Our fundamental analysis conducts a risk assessment across four key areas: industry, company, governance and sustainability and portfolio risks. This framework ensures we focus on the stock’s risk reward potential across all relevant fields. ESG is integrated throughout the process.
- Portfolio construction. Offers diversification from index-based strategies. Companies are selected for their growth potential from diverse geographic revenues/profits, business models and exposure to long-term investment themes – not country or sector weightings. Our risk-based approach to investing ensures we can deliver a truly stock driven portfolio of 20-40 of our best ideas
This is a general depiction of the investment team’s methodology and may not reflect the exact investment process for any particular strategy.
Portfolio Construction & Management
- We consider portfolio construction with equal importance to the research process. We focus on five areas – long-term thematics, company classifications, geographic revenue/profit, end user markets and industry lifecycles.
- These aid our understanding of the portfolio’s diversity, effectively manage risk and help ensure we are positioned to capture long-term growth.
Management Team
The Franklin Global Long Term Unconstrained strategy is managed by a dedicated and highly experienced investment team. Our investment team takes a collaborative approach to investing designed to optimize the decision-making process. In addition, the team has access to the Franklin Equity Group’s full complement of research analysts and centralized resources. This team-inclusive approach results in a thoroughly researched portfolio of only the highest conviction ideas.
Zehrid Osmani
Head of Global Long-Term Unconstrained
Yulia Hofstede
Portfolio Manager
Jonathan Regan, CFA
Portfolio Manager
WHAT OUR MANAGERS THINK
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Contact Us
Please connect with us to learn more about our investment capabilities and how we can help meet your investing needs.
Footnotes
1. This is the fund managers’ current thinking and may be subject to change.
Important Legal Information
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. All investments involve risks, including possible loss of principal. There is no guarantee that a strategy will meet its objective. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where a strategy invests in emerging markets, the risks can be greater than in developed markets. Where a strategy invests in derivative instruments, this entails specific risks that may increase the risk profile of the strategy. Where a strategy invests in a specific sector or geographical area, the returns may be more volatile than a more diversified strategy.
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