REFOCUS, REVIEW
& REBUILD

Help your clients prepare for tomorrow and recover with confidence.

Living through a pandemic requires resilience, planning and patience. The COVID-19 pandemic has changed how we work, learn, socialize and invest. To help contain the virus, public health experts say we must follow the ‘3 Ws’: wear a mask, wash your hands, watch your distance in public.

Help your clients to focus on what they can control amid the uncertainty. Clients can take a ‘three Rs’ approach to their portfolios: Refocus, Review and Rebuild.

STEP 1: REFOCUS

Help your clients refocus on their goals by analyzing their circumstances and appetite for risk. Has anything changed?

Have an open conversation with your clients about how they can move forward to achieve their financial objectives.

LEARN MORE

STEP 2: REVIEW

Whether your clients rode out the downturn or waited on the tarmac, their portfolios may look different today than they did in January. Consider consolidating, substituting and complementing their holdings to help them prepare for what’s next. Together, these ideas will help you identify gaps in your clients’ portfolios, which can point the way to solutions that will help them rebuild.

LEARN MORE

STEP 3: REBUILD - Back to Basics

Focus on the fundamentals of research and risk management to give investors a strong core of fixed income – with the flexibility to take advantage of new opportunities.

A solid core

Currency-Managed Global Exposure

Diversification

More Yield, Without More Risk


Take another look at the foundation of your clients’ portfolios. A strong core of fixed income can help reduce drawdowns and provide your clients with stable returns.

LEARN MORE

STEP 3: REBUILD - Quality Counts

Amidst the uncertainty, investors may be drawn to the resilience of high-quality and well-managed companies with solid balance sheets. High-quality companies tend to regularly pay and grow dividends, increasing their return potential.


AVERAGE ANNUALIZED RETURN BY DIVIDEND POLICY

30-Year Period Ending September 30, 2020

DIVIDEND GROWERS

DIVIDEND-PAYING STOCKS

NON-DIVIDEND-PAYING STOCKS

S&P 500 INDEX

9.85% 8.78% 4.86% 7.30%


It can be a challenge to increase quality while maintaining growth. An experienced manager with a dividend-focused approach can help.

LEARN MORE

STEP 3: REBUILD - Return of Active

91% of investors want to have investments that can outperform the markets and 90% believe that risk management is important*. If your clients share these views, they may want to reduce exposure to passive or index-like products. Popular stocks tend to make up an outsized portion of any benchmark. This is certainly true of the FAANG stocks today.

FAANG STOCKS' WEIGHTS AS A % OF THE MSCI WORLD INDEX

As of September 30, 2020

FACEBOOK

AMAZON

APPLE

NETFLIX

GOOGLE

2.26% 4.81% 6.68% 0.79% 3.13%


Take clients beyond the benchmarks. Skilled active managers can help navigate volatility while seeking areas of opportunity.

*Franklin Templeton Global Investor Sentiment Survey 2018

LEARN MORE

STEP 3: REBUILD - Sector Growth Trends

The current crisis has, in many cases, accelerated change in high growth areas like cloud computing, e-payment and health care. This may be viewed as creating opportunity amidst the chaos.

IN THE U.S., TECH AND HEALTHCARE ARE OUTPACING THE FIELD

Return on Equity: 15-Year Period Ending September 30, 2020

MSCI USA INFO TECH INDEX

MSCI USA HEALTH CARE INDEX

MSCI USA INDEX

28.27% 17.17% 11.65%


Take advantage of market trends with investment experts who are based in the heart of Silicon Valley and aware of innovations as they evolve.

LEARN MORE

Keep updated with the latest resources and insights

STEP 1: REFOCUS

Performance of the S&P 500 Index

Performance of the S&P 500 Index Source: S&P 500, as of August 31, 2020

Life during a pandemic

The recovery of the global economy will likely be a gradual process, with more uncertainty and obstacles to overcome. In the meantime, investor sentiment is supported by massive monetary and fiscal backstops.

Help your clients refocus on their goals by analyzing their circumstances and appetite for risk. Has anything changed?

Have an open conversation with your clients about how they can move forward to achieve their financial objectives.

STEP 2: REVIEW

Contents may have shifted

Whether your clients rode out the downturn or waited on the tarmac, their portfolios may look different today than they did in January. Consider consolidating, substituting and complementing their holdings to help them prepare for what’s next. Together, these ideas will help you identify gaps in your clients’ portfolios, which can point the way to solutions that will help them rebuild.

Get a second opinion

Even the best portfolios need adjustments from time to time. BESTBUILT ® HYPOTHETICALS allows you to analyze portfolios and test your best ideas using the entire universe of Canadian mutual funds and ETFs.

TRY BESTBUILT NOW

Focus on the fundamentals of research and risk management to give investors a strong core of fixed income – with the flexibility to take advantage of new opportunities.

A solid core

Build a core fixed income strategy around high-quality government and corporate bonds.

Currency-Managed Global Exposure

Invest abroad for enhanced returns from yields and currencies while reducing exchange rate exposure.

Diversification

Take a multi-sector approach to help your clients benefit from the best yield opportunities while reducing volatility.

More Yield, Without More Risk

Increase income without adding significant risk.

Take another look at the foundation of your clients portfolios. A strong core of fixed income can help reduce drawdowns and provide your clients with stable returns.

Amidst the uncertainty, investors may be drawn to the resilience of high-quality and well-managed companies with solid balance sheets.

High-quality companies tend to regularly pay and grow dividends, increasing their return potential.

Average Annualized Return by Dividend Policy

30-Year Period Ending August 31, 2020
Average Annualized Return by Dividend Policy

It can be a challenge to increase quality while maintaining growth. An experienced manager with a dividend-focused approach can help.

Source of chart: Ned Davis Research Group, Inc., March 31, 2020. Indexes This chart represents the dividend-paying and non-dividend-paying stocks of the S&P 500 Index. The average annual total returns are calculated using monthly equal-weighed geometric averages of the total returns of all dividend-paying stocks and non-dividend-paying stocks. Returns do not reflect the deduction of fees or sales charges.

91% of investors want to have investments that can outperform the markets and 90% believe that risk management is important*. If your clients share these views, they may want to reduce exposure to passive or index-like products.

Popular stocks tend to make up an outsized portion of any benchmark. This is certainly true of the FAANG stocks today.

Historical Weights as a % of the MSCI World Index

As of August 31, 2020
Historical Weights as a % of the MSCI World Index

Take clients beyond the benchmarks. Skilled active managers can help navigate volatility while seeking areas of opportunity. 

*Franklin Templeton Global Investor Sentiment Survey 2018

We’re here to help. Call or email your Franklin Templeton wholesaler to learn how we can support you, your clients and your prospective clients in today’s uncertain markets.

INSIGHTS