Deep Water Waves

Join the discussion with our strategists and explore the interplay between the long-term drivers that face investors over the coming decade.

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Kim Catechis

Kim Catechis
Investment Strategist,
Franklin Templeton Investment Institute

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Kim Catechis has 34 years of investment experience spanning developed and emerging market equities. He joined Martin Currie in 2010 and was its Head of Investment Strategy since 2019, before transitioning to Franklin Templeton Investment Institute in April 2021.

Deep Water Waves: Global Fixed Income

Friday, November 05, 2021

This webinar will feature a lively panel discussion on global fixed income trends with two investment experts from Western Asset Management and Brandywine Global, firms with a combined US$556 billion in assets globally.
Available in English and French.

Research on the long-term drivers of performance
facing investors

We are living in a period of great seismic change, where our world is constantly evolving. This progression and its consequences are the focus of Franklin Templeton Investment Institute’s research, Deep Water Waves.

These waves represent powerful long-term drivers that will fundamentally alter the economic, political and public policy foundations for all asset prices.

Authored by Kim Catechis, strategist at the Franklin Templeton Investment Institute (FTII), Deep Water Waves includes in-depth research exploring each wave and their potential impact.

Deep Water Waves also analyzes how 70 countries* from across the globe are preparing for the challenges outlined in the main paper, providing ratings for each nation.

In addition, the FTII team will explore the implications of these major waves on the different asset classes with Franklin Templeton’s range of specialist investment managers in a special webinar series.

WHAT ARE DEEP WATER WAVES
(2:00 running time)

Forces for Change

THE DEMOGRAPHIC WAVE

THE DEMOGRAPHIC WAVE: Global growth is set to slow to below its long-term trend over the next generation. The countries that have driven global economic growth over the past two decades are growing older. National borders will continue to harden as anti-immigration sentiment persists or grows in many countries, leading to significant negative implications for lower-income countries that depend on remittances.

THE DEMOGRAPHIC WAVE: Global growth is set to slow to below its long-term trend over the next generation. The countries that have driven global economic growth over the past two decades are growing older. National borders will continue to harden as anti-immigration sentiment persists or grows in many countries, leading to significant negative implications for lower-income countries that depend on remittances.

THE TECHNOLOGY WAVE

THE TECHNOLOGY WAVE: The next decade will see an urgent and widespread boom in investment in innovation across all economic sectors. It will be in both private and public sectors, with much of it driven by geopolitical imperative, not just economic value.

THE TECHNOLOGY WAVE: The next decade will see an urgent and widespread boom in investment in innovation across all economic sectors. It will be in both private and public sectors, with much of it driven by geopolitical imperative, not just economic value.

THE DEBT WAVE

THE DEBT WAVE: The tension between inflation and deflation will continue, but the calculus has changed. Longer term, control of inflation trumps economic growth, but the resolution will vary by country or region. COVID-19 has exacerbated socioeconomic inequality in many countries; progressive and redistributive taxation will be prioritized globally, unorthodox economic experiments will be attempted, and Big Government is back.

THE DEBT WAVE: The tension between inflation and deflation will continue, but the calculus has changed. Longer term, control of inflation trumps economic growth, but the resolution will vary by country or region. COVID-19 has exacerbated socioeconomic inequality in many countries; progressive and redistributive taxation will be prioritized globally, unorthodox economic experiments will be attempted, and Big Government is back.

THE GEOPOLITICAL WAVE

THE GEOPOLITICAL WAVE: Geopolitics is set to increase its influence on investment outcomes over the next decade, as the confrontation between the US and China plays out, with asymmetric cyberwarfare the most likely scenario. Economic polarization between nations and regions will likely increase. After the pandemic, wealthy countries may feel compelled to renew their commitments to multilateral organizations like the World Bank and the International Finance Corporation as mechanisms to help low-income countries. But the development gap remains and is growing, so migration pressures continue.

THE GEOPOLITICAL WAVE: Geopolitics is set to increase its influence on investment outcomes over the next decade, as the confrontation between the US and China plays out, with asymmetric cyberwarfare the most likely scenario. Economic polarization between nations and regions will likely increase. After the pandemic, wealthy countries may feel compelled to renew their commitments to multilateral organizations like the World Bank and the International Finance Corporation as mechanisms to help low-income countries. But the development gap remains and is growing, so migration pressures continue.

THE CLIMATE CHANGE WAVE

THE CLIMATE CHANGE WAVE: Climate change will increasingly exacerbate border tensions, threaten agricultural production and heighten social stresses in many regions. This process also heightens the existing divide within countries: e.g., rural/urban; coal region vs. solar region.

THE CLIMATE CHANGE WAVE: Climate change will increasingly exacerbate border tensions, threaten agricultural production and heighten social stresses in many regions. This process also heightens the existing divide within countries: e.g., rural/urban; coal region vs. solar region.

Together, these resources will provide investors with a comprehensive look at how the investment world is changing, and how they can prepare for the world of tomorrow.

We encourage you to join the conversation and read the attached documents. Whether you read the summary, the full paper or study the country specific insights, we welcome your comments and feedback as we continue to develop investment implications and conclusions. Contact us at InvestmentInstitute@franklintempleton.com.

Insights