REVOLUTIONIZE YOUR PORTFOLIO Capitalizing on GL BAL Trends
The World Is Changing In a complex world that is constantly evolving, we try to understand the forces of change and that our world will be very different in the next decade. Here are three global trends which we believe will shape our future: 1] 2] 3] The Rise of Emerging Markets Consistent and strong growth recorded by emerging markets lead to greater urbanization globally. Global Urbanization Growth in emerging markets leads to greater infrastructure spending. See how this increases the long-term demand for commodities and expenditure on Information & Communication Technology (ICT). Shifting Demographics The new wealth creation in emerging markets has led to an increase in consumerism as people start to demand a better standard of living. This results in two key consumer groups the new middle class and the aging population. CAPITALIZING ON GLOBAL TRENDS In today s interconnected world, it is essential to diversify and seize opportunities amid new global challenges. A recent survey conducted by Franklin Templeton Investments showed investors in Asia are more likely to capitalize on the investment benefits of diversifying outside of their home country market, with 86 percent of respondents selecting emerging markets as the best investment opportunities in the decade ahead. 1 In the following pages, learn more about how these global trends develop from an emerging markets perspective and how Franklin Templeton Investments can help align your investment strategies to benefit from them. 1. Source: Franklin Templeton Global Investor Sentiment Survey, February 2011. Survey commissioned by Franklin Templeton Investments and conducted by ORC International. A minimum of 1,000 adults were surveyed per country. Copyright 2011. Franklin Templeton Investments. All rights reserved.
1] The Rise of Emerging Markets Over 80% of growth in demand is expected to come from Asia. 2 The consistent strong growth recorded by emerging markets in the past decade or so has been propelling key emerging economies into the big league. Strong Emerging Markets GDP Growth GDP Compounded Annual Growth from 2011 to 2015 (estimates) 3 9.14% 5.75% 3.87% World Developed Markets Emerging Markets With China s economy now only second to that of the U.S., it could become the world s largest economy by 2020. 3 Key Global Players in 2020 Top 10 Largest Economies Based on GDP (PPP in I$)* 4 Rank 2000** 2010 2015 1 U.S. U.S. China 2 Japan China U.S. 3 Germany Japan India 4 France India Japan 5 UK Germany Russia 6 Italy Russia Germany 7 China UK Brazil 8 Brazil France UK 9 Canada Brazil France 10 Spain Italy Mexico *PPP = purchasing power parity. I$ = International Dollar. **Source: World Bank, World Development Report 2000. 2. Source: OECD 2010. The Emerging Middle Class in Developing Countries. 3. Source: IMF, WEO as of October 2010. 4. Source: Euromonitor International from IMF, International Financial Statistics and World Economic Outlook/UN/national statistics. As of July 7, 2010. franklintempleton.sg Revolutionalize Your Portfolio: Capitalizing on Global Trends 1
2] Global Urbanization Almost 70% of the world s population will be living in urban areas by 2050. 5 Urbanization and rapid industrialization drives the need for infrastructure development and spending, which is essential for an economy to reach its full potential. We will see an increase in the long-term demand for commodities. As seen in the charts below, the consumption of electricity and energy usage in emerging markets is likely to increase over the years. Also, being an integral part of urban development, there will be greater adoption of technology and increased future consumption among emerging markets. Over the next decade, demand for natural resources will rise by at least a third. 6 Increased Consumption and Future Demand in Emerging Markets Energy Commodities 7 and Technology 8 307 Million 90.9% 97.0% 75.8% 80.6% 88.9% 16.4% 22.6% 21 Million 87 Million 4.9% 8.2% 24.2% 9.6% 81.2% 28.8% 19.2% 113.7% 155 Million 0.9% 9.0% 15.9% UNITED STATES Current consumption of electric power and energy use Potential based on population ROMANIA VIETNAM NIGERIA Current consumption of Internet users, computers and cell phones ELECTRIC POWER ENERGY USE INTERNET USERS COMPUTERS CELL PHONES 5. Source: State of the World s Cities 2010/2011, UN-HABITAT, Bridging the Urban Divide, as of 2010. 6. Source: McKinsey Quarterly, Pricing The Planet, as of June 2010. 7. Source: IMF (World Economic Outlook Database, October 2010), 2010 World Bank. 2 Revolutionalize Your Portfolio: Capitalizing on Global Trends franklintempleton.sg
India is the second largest consumer of mobile Internet outside of the U.S. 9 1.3 Billion 1.2 Billion 15.5% 18.6% 22.5% 5.7% 48.4% 3.6% 6.6% 4.5% 3.3% 30.4% 194 Million 0.9% 41.7% 14.5% 15.5% 37.5% 16.1% 78.5% BRAZIL INDIA CHINA 8. Source: 2010 World Bank (World Development Indicators), ITU (International Telecommunication Union). As of 2009, most recent data available. 9. Source: Bango, as cited in press release, as of February 2010. franklintempleton.sg Revolutionalize Your Portfolio: Capitalizing on Global Trends 3
3] Shifting Demographics Asia has more consumers than Europe, North America, Latin America and Africa combined. 10 There are two key consumer groups in the future: 1) The new middle class consumers 2) The aging population THE RISE OF MIDDLE CLASS CONSUMER The growth of the new middle class, especially in Asia, is projected to increase rapidly over the coming years and this will result in greater demand for consumer goods and services. Asia Is Leading the Way Percentage of Middle Class in the West and Asia 12 90% 60% 620 Million 716 Million 2.0 Billion 3.6 Billion Asian consumers could account for over 40 per cent of global middle 30% 0% 52 Million 1960 286 Million 1980 657 Million 2006 558 Million 2025 class consumption. 11 Asia West More Disposable Income Means More Spending Projected Spending by the Middle Class (in USD) 13 23% 42% 59% $21.3 Trillion in 2009 $35.0 Trillion in 2020 $55.7 Trillion in 2030 Asia Pacific North America Europe Central/South America Middle East/Africa 10. Source: International Labor Organization. Consumers are represented by the economically active population (labor force) of specific countries/regions as defined by the International Labor Organization. 11. Source: OECD, Working Paper No. 285, The Emerging Middle Class in Developing Countries, as of 2010. 12. Source: United Nations, World Bank, Surjit S. Bhalla, Second Among Equals: The Middle Class Kingdoms of India and China, May 2007, www.oxusinvestments.com. 13. Source: OECD, Working Paper No. 285, The Emerging Middle Class in Developing Countries, as of 2010. 4 Revolutionalize Your Portfolio: Capitalizing on Global Trends franklintempleton.sg
THE AGING POPULATION While emerging markets have a relatively young working population, birthrates have been declining in some rapidly urbanizing societies. Greater prosperity and a higher standard of living have contributed to longer life expectancies, in line with increases in healthcare expenditures. A Global Issue Affecting All Major Economies Emerging Markets Have Largest of Elderly in Absolute Terms 15 Percentage and Size (in Millions) of Ages 65 and Older 30% 288 317 332 20% 241 10% 0% 197 171 335 246 1,218 979 702 484 2000 2010 2020 2030 2040 2050 Developed Markets Emerging Markets Life expectancy in China, India & Brazil increased by 10 years from 1980 to 2010. 14 Growing Demand in Emerging Markets Potential for Greater Consumption in Healthcare Goods & Services 16 1.2 Billion 0.5% 1.3 Billion 1.4% 307 Million 91.0% 21 Million 4.6% 87 Million 0.7% 155 Million 0.9% 194 Million 7.6% UNITED STATES ROMANIA VIETNAM NIGERIA BRAZIL INDIA Current consumption of healthcare related products & services Potential based on population CHINA 14. Source: World Bank and CIA World Factbook 2010. 15. Source: U.S. Census Bureau, International Database, as of November 2010. 16. Source: IMF (World Economic Outlook Database, October 2010), 2010 World Bank. Consumption percentages were calculated by establishing a baseline consumption amount of $8,000 and then measuring actual consumption per capita against the baseline. franklintempleton.sg Revolutionalize Your Portfolio: Capitalizing on Global Trends 5
In a World of Global Change, Opportunities Are Borderless The top performing markets will change, underlying a need for diversification or investors will miss out on potential opportunities in other parts of the world. Leaders Rotate The Need to Be Geographically Diversified 17 Rank 2010 2009 2008 2007 2006 1 Thailand Brazil Morocco Peru China 2 Peru Indonesia Colombia Brazil Indonesia 3 Chile Russia Israel Turkey Morocco SIN 15 13 19 23 12 Putting Your Beliefs into Action Singaporeans See Opportunities in Offshore Equity & Fixed Income Investments 18 BELIEF ACTION In Singapore, planned investments are in line with where investors believe the best equity and fixed income opportunities lie. 22% 78% Over 78% of respondents see potential outside Singapore 24% 76% 76% of respondents plan on investing outside of Singapore over the next 10 years See opportunities outside Singapore Plan to invest in Singapore only 17. Source: Morgan Stanley All Country World Index. The performance of countries and unmanaged indexes does not reflect expenses and may not correspond to the performance of the fund, which is actively managed and incurs expenses. 6 Revolutionalize Your Portfolio: Capitalizing on Global Trends franklintempleton.sg
When you search worldwide, you find more and better bargains than when you monitor only one nation. SIR JOHN TEMPLETON, TEMPLETON FUNDS FOUNDER AND FORMER CHAIRMAN 2005 2004 2003 2002 2001 Egypt Colombia Thailand Pakistan Russia Colombia Egypt Turkey Czech Republic Korea Jordan Hungary Brazil Indonesia Colombia 32 32 37 24 35 Investing Beyond Singapore More Than 60% of Respondents Intend to Invest Overseas in the Future 18 48% Invest outside domestic market 65% Invest outside domestic market 76% Invest outside domestic market 52% Don t invest outside domestic market 35% Don t invest outside domestic market 24% Don t invest outside domestic market There is an expected increase in planned investments beyond Singapore, from now to over the next 10 years. January 2011 Over This Year (2011) Over the Next 10 Years 18. Source: Franklin Templeton Global Investor Sentiment Survey, February 2011. Survey commissioned by Franklin Templeton Investments and conducted by ORC International. A minimum of 1,000 adults were surveyed per country. Copyright 2011. Franklin Templeton Investments. All rights reserved. franklintempleton.sg Revolutionalize Your Portfolio: Capitalizing on Global Trends 7
Capitalizing on Global Trends with Franklin Templeton Investment Funds (FTIF) Franklin Asian Flex Cap Fund Franklin U.S. Low Duration Fund Franklin Biotechnology Discovery Fund Franklin World Perspectives Fund Franklin Global Growth Fund Templeton Asian Bond Fund Franklin Global Real Estate Fund Templeton Asian Growth Fund Franklin Gold and Precious Metals Fund Templeton Asian Smaller Companies Fund Franklin India Fund Templeton BRIC Fund Franklin MENA Fund Templeton China Fund Franklin Mutual Euroland Fund Templeton Eastern Europe Fund Franklin Mutual European Fund Templeton Emerging Markets Bond Fund Franklin Mutual Global Discovery Fund Templeton Emerging Markets Fund Franklin Natural Resources Fund Templeton Emerging Markets Smaller Companies Fund Franklin Real Return Fund Templeton Frontier Markets Fund Franklin Strategic Income Fund Templeton Global (Euro) Fund Franklin Technology Fund Templeton Global Bond Fund Franklin Templeton Japan Fund Templeton Global Fund Franklin U.S. Equity Fund Templeton Global Smaller Companies Fund Franklin U.S. Focus Fund Templeton Global Total Return Fund Franklin U.S. Government Fund Templeton Growth (Euro) Fund Franklin U.S. Opportunities Fund Templeton Korea Fund Franklin U.S. Small-Mid Cap Growth Fund Templeton Latin America Fund Franklin U.S. Total Return Fund Templeton Thailand Fund Capitalizing on Emerging Markets Growth Gearing up for Global Urbanization Demand for Commodities Information & Communication Technology Positioning for the Shifts in Demographics Rise of Middle Class Consumer Aging 8 Revolutionalize Your Portfolio: Capitalizing on Global Trends franklintempleton.sg
Gain from Our Perspective Franklin Templeton Investments distinct multi-manager structure combines the specialized expertise of three world-class investment management groups Franklin, Templeton and Mutual Series. Together, they provide a comprehensive range of core and specialized investment solutions to international clients. TIME-TESTED EXPERTISE Each of our portfolio management groups operates autonomously, relying on its own research and staying true to the individual investment disciplines that underlie its success. FRANKLIN TEMPLETON MUTUAL SERIES Founded in 1947, Franklin is a recognized leader in fixed income investing and also brings expertise in growth- and value-style U.S. equity investing. Founded in 1940, Templeton pioneered international investing and, in 1954, launched what has become the industry s oldest global fund. Today, Templeton offers investors the broadest global reach in the industry with offices in over 29 countries. Founded in 1949, Mutual Series is dedicated to a unique style of value investing, searching aggressively for opportunity among what it believes are undervalued stocks, as well as arbitrage situations and distressed securities. TRUE DIVERSIFICATION, NOT DUPLICATION Because our management groups work independently and adhere to distinctly different investment approaches, our funds typically have a low number of common portfolio holdings. For example, an investor who buys shares of a Franklin equity fund and a Mutual Series equity fund will typically see only a small percentage of stocks held in both portfolios. EXPERIENCE, DISCIPLINE AND INSIGHT Franklin Templeton Investments has sought out opportunities by adhering to these principles for over 60 years: Don t follow the crowd. Buy when markets are down. Hunt for value and bargains. Search worldwide. And evaluate each investment based on strict criteria. These principles have helped us build an enviable record of performance, achieve the financial goals of millions of investors, and made Franklin Templeton one of the largest, most respected mutual fund companies in the world. To learn more about our products and services visit franklintempleton.sg or call us at (65) 6241 2662. franklintempleton.sg Revolutionalize Your Portfolio: Capitalizing on Global Trends 9
Templeton Asset Management Ltd. 7 Temasek Boulevard #38-03 Suntec Tower One Singapore 038987 Fax: (65) 6332 2295 (65) 6241 2662 franklintempleton.sg This document is for information only and does not constitute investment advice or a recommendation and was prepared without regard to the specifi c objectives, fi nancial situation or needs of any particular person who may receive it. Any research and analysis contained in this presentation has been procured by Franklin Templeton Investments for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Any views expressed are the views of the fund manager and do not constitute investment advice. The underlying assumptions and these views are subject to change. Franklin Templeton Investments accepts no liability whatsoever for any direct or indirect consequential loss arising from the use of this commentary or any information, opinion or estimate herein. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance. Past performance or any prediction or forecast is not necessarily indicative of future performance of the Fund. Subscriptions may only be made on the basis of the most recent Prospectus which is available at Templeton Asset Management Ltd or our authorised distributors. Potential investor should read the details of the Prospectus before deciding to subscribe for or purchase the Fund. This shall not be construed as the making of any offer or invitation to anyone in any jurisdiction in which such offer is not authorised or in which the person making such offer is not qualifi ed to do so or to anyone to whom it is unlawful to make such an offer. In particular, this Fund is not available to U.S. and Canadian residents or citizens. Opinions expressed within the promotion are subject to change without prior notice. Investors may wish to seek advice from a fi nancial adviser before making a commitment to invest in shares of the Fund. In the event an investor chooses not to seek advice from a fi nancial adviser, he/she should consider whether the Fund is suitable for him/her. Copyright 2012 Franklin Templeton Investments. Biz Regn No: 199205211E. All rights reserved. FTIFSG B 04/12