templeton international equity separately managed accounts
TRANSCRIPT
Templeton International Equity Separately Managed Accounts
CITY OF SARASOTA PENSION PLAN | May 11, 2020
Andrew Burkly, CFAInstitutional Portfolio Manager Templeton Global Equity Group Templeton Investment Counsel LLC
Brian BrennemanVice PresidentSenior Advisor Consultant Franklin Templeton Distributors, Inc.
ITEM 9.1. PAGE 1 OF 38
Templeton International Equity SMA
Table of Contents
Franklin Templeton Overview and Process Tab 1
Summary, Performance and Characteristics Tab 2
Appendix Tab 3
2For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
As of March 31, 2020.1. Investment professionals include portfolio managers, portfolio managers/analysts, research analysts and traders of Franklin, Templeton, Franklin Mutual Series, and subsidiary investment managementgroups.2. 2018 NMG Global Asset Management Study. The study includes responses from 3,064 retail advisors, gatekeepers and institutional investors across 14 of the largest markets for asset management.Based on NMG’s Brand Ranking score. Brand ranking is a proprietary score that ranks managers based on the portion of top-of-mind citations received across the following metrics: awareness, assetclasses, brand attributes.3. As of March 31, 2020.
Franklin Templeton Overview
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Franklin Templeton is a global leader in asset management serving clients in over 170 countries
34Countries with Offices
70+Years of Asset Management Experience
$580.3B(USD) Total Assets Under Management
600+Investment Professionals1
Franklin Templeton is a Top 5 asset management brand globally2 Assets Under Management3
200+Investment Strategies Offered Worldwide
United States…….....68%Europe…………........16%Asia-Pacific…………..8%Latin America………...4%Canada…......…….…..3%Middle East/Africa……1%
Templeton International Equity SMA
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Franklin Templeton Overview
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
• Collaborative approach: We build long-term relationships founded on a deep understanding of client goals and challenges. This allowsus to create solutions that best fit our clients’ needs.
• Investment excellence and rigor: Our specialized investment teams bring unique expertise and perspectives. Choose from active,smart-beta and passive investment strategies across asset classes. Our investment processes are disciplined and deploy fully-integrated, economic-based approaches to ESG.
• Robust risk management: We focus on optimizing, not simply minimizing, risk. Our approach is based on what we call the three “I’s”:independent, integrated, insightful.
• Global scale and local insights: Take advantage of the local insight and expertise of our investment professionals located in 24countries. And benefit from over 60 years of global investing experience.
• Applied innovation: We have a track record of delivering pioneering products that connect clients to new opportunities. Fromembedding data scientists within our investment teams, to partnering with FinTech startups—when we think about innovation, we thinkfirst about how it will benefit our clients.
As of March 31, 2020, unless otherwise noted.
Everything We Do Has a Single Focus: Delivering Better Client Outcomes
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COLLABORATIVE APPROACH
INVESTMENTEXCELLENCEAND RIGOR
APPLIEDINNOVATION
GLOBAL SCALEAND LOCAL
INSIGHTS
ROBUST RISKMANAGEMENT
0
Templeton International Equity SMA
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Everything We Do Has a Single Focus: Delivering Better Client Outcomes
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
• We collaborate with clients and
colleagues to develop new ideas and
unlock opportunities.
• We build teams of talented and
experienced investment professionals
who are experts at what they do.
• Everything we do is focused on
achieving your goals. We only do well
if you do well.
• We invest in innovative tools,
technologies and companies to help
deliver better client outcomes.
• We focus on the future while drawing
on our pioneering history of delivering
industry firsts.
• All our efforts are guided by a
common principle: keep the client at
the heart of everything we do.
• We connect our capabilities to create
solutions designed to help clients
achieve their goals.
• We offer a wide range of specialized
approaches through our global
investment network.
• Our investment teams have unique
expertise and perspectives.
POWERFULLY LINKINGour capabilities and experience to unlock
opportunities
HARNESSING OUR BEST THINKINGto achieve
shared ambitions
CONTINUOUSLY EVOLVINGwhile staying true
to our values
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Templeton International Equity SMA
Our Unique Culture Sets Us Apart
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Source: Franklin Templeton (FT), as of March 31, 2020, based on latest available data. Total combined Assets Under Management (Total AUM) combines U.S. and non-U.S. AUM of the investment management subsidiaries of the parent
company, Franklin Resources, Inc. (FRI) [NYSE: BEN], a global investment management organization operating as FT. Only selected business entities within FT claim compliance with the GIPS standards as described in the table of
contents if applicable. Total and platform AUM includes discretionary and non-discretionary accounts, including pooled investment vehicles, separate accounts and other vehicles. Total and platform AUM may also include advisory
accounts with or without trading authority. In addition, assets for which certain FT advisers provide limited asset allocation advisory services, and assets that are not allocated to FT products are not included in the AUM figures shown.
Franklin Templeton Multi-Asset Solutions may invest in various investment platforms advised by a number of investment advisory entities within FT. Platform AUM reported for FT Multi-Asset Solutions therefore may include certain AUM
separately reported under each utilized investment platform. Total AUM also includes assets managed by certain FT advisers that do not form part of the selected investment platforms shown. As a result, the combined platform AUMs may
not equal Total AUM and may be calculated and reported separately for regulatory or other purposes under each investment adviser. Each local asset manager may be considered as an entity affiliated with or associated to FT by virtue of
being a direct or indirect wholly-owned subsidiary of FRI, an entity or joint venture in which FRI owns a partial interest, which may be a minority interest, or a third party asset management company to which investment advisory services
have been delegated by an FT adviser. 6
Templeton International Equity SMA
Investment Capabilities Overview
FRANKLIN TEMPLETON
Total Combined Assets Under Management: US$580.3 Billion
Institutional AUM: US$151.3 Billion
Single Business Development, Relationship Management, and Consultant Relations Platform
2
Equity
5
Fixed Income
8
Multi-Asset Solutions
11
Alternatives
AUM
US$211.4 Billion US$225.9 Billion US$95.3 Billion US$42.6 Billion
CAPABILITIES
•
Value
•
Government
•
Multi-Asset Income
•
Commodities
•
Deep Value
•
Municipals
•
Diversified Outcome-Oriented
•
Infrastructure
•
Core Value
•
Corporate Credit
•
Risk Premia
•
Real Estate
•
Blend
•
Bank Loans
•
Smart Beta
•
Hedge Funds
•
GARP
•
Securitized
•
Balanced Allocation
•
Private Equity
•
Growth
•
Multi-Sector
•
Target Date/Risk
•
Private Debt
•
Convertibles
•
Currencies
•
Model Portfolios
•
Sector
•
Sukuk
•
Inflation Protection
•
Shariah
•
Managed Volatility
•
Smart Beta
INVESTMENT
•
Templeton Global Equity Group (1940)
•
Franklin Templeton Fixed Income Group (1970)
•
Franklin Templeton Multi-Asset Solutions (1948)
•
Franklin Real Asset Advisors (1984)
TEAMS
•
Franklin Equity Group (1947)
•
Templeton Global Macro (1986)
•
Franklin Systematic (2011)
•
Darby Overseas Investments (1994)
•
Franklin Mutual Series (1949)
•
Franklin LAM-Fixed Income (1993)
•
K2 Advisors (1994)
• Franklin Templeton Emerging Markets Equity (1987) •
Pelagos (2005)
•
Franklin LAM-Developed Markets Equity (1993)
•
Benefit Street Partners (2008)
•
Edinburgh Partners (2003)
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Templeton Global Equity Group—Value Investors Focused on Seeking Long-Term Capital Growth for Our Clients
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RIGOROUS BOTTOM-UP STOCK SELECTIONeveryone is an analyst in a broadly experienced research team, identifying undervalued stocks across global sectors and regions
FORTITUDE TO BE DIFFERENTconviction to purchase out-of-favor securities and patience to wait for value recognition
LONG-TERMPERSPECTIVEfive-year horizon takes advantageof short-term price volatility to reveal long-term investment opportunities
DISCIPLINED, REPEATABLE PROCESSadherence to valuation-driven philosophy and process that have navigated every market cycle over seven decades
TEMPLETON GLOBAL EQUITY GROUP
What Sets Us Apart
Templeton International Equity SMA
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Templeton Global Equity Group-Value Investors Focused on Seeking Long-Term
Capital Growth for Our Clients
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
We Utilize a Disciplined, Consistent ApproachBased on Three Timeless Principles of Investing
Value• Uncover bargains—seeking companies trading at large discounts to their
business value
• Business value—based on normalized earnings, cash flow or asset value potential
• Flexible approach in a disciplined framework
Patience• Rolling five-year time horizon focused on normalized business value
• Long-term focus takes advantage of short-term price volatility to reveal investmentopportunities
• Patience allows time for value recognition and has historically resulted in low turnover
Bottom-up stock picking• Build portfolios with undervalued securities identified through research process
• Portfolio structure reflects where we are finding value across sectors and regions
• Portfolio management process seeks to buy pessimism and sell optimism
The Templeton Investment Philosophy
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“The best bargains are those stocks having the lowest prices in relation to possible earning power of future years.”
—Sir John TempletonOctober 1957
“The best bargains are those stocks having the lowest prices in relation to possible earning power of future years.”
—Sir John TempletonOctober 1957
Templeton International Equity SMA
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The Templeton Investment Philosophy
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
CHAIRMANDr. Sandy Nairn, CFA35 Years Industry ExperienceEDINBURGH, UNITED KINGDOM
Investment team information is as of March 31, 2020.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Templeton Global Equity Group Organizational Structure
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CHIEF INVESTMENT OFFICERAlan Bartlett21 Years Industry ExperienceNASSAU, BAHAMAS
PORTFOLIO MANAGER/ANALYST
Peter Sartori29 Years Industry ExperienceSINGAPORE, SINGAPORE
35 Portfolio Managers & Research Analysts
Average 14 Years with TempletonSpeak 13 Languages
Average 20 Years of Industry Experience
Stable Team/Historically Low Turnover
North America15 PM/Analysts
6 Analysts
Europe3 PM/Analysts
2 Analysts
Asia4 PM/Analysts
3 Analysts
Australia1 PM/Analyst
1 Analyst
DIRECTOR OF PORTFOLIO MANAGEMENT
Antonio T. Docal, CFA40 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES
PORTFOLIO INSIGHTS TEAM
C. Reed Hutchens, CFA32 Years Industry ExperienceFORT LAUDERDALE, UNITED STATES
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RESEARCH DIRECTORS
Peter Nori, GLOBAL33 Years Industry
ExperienceFORT LAUDERDALE
Matt Nagle, AMERICAS21 Years Industry
ExperienceFORT LAUDERDALE
Tian Qiu, EUROPE23 Years Industry
ExperienceEDINBURGH
Paul de Josselin, ASIA12 Years Industry
ExperienceMELBOURNE
Harlan Hodes, SMALL CAP20 Years Industry
ExperienceFORT LAUDERDALE
Maarten Bloemen, ESG34 Years Industry
ExperienceTORONTO
Templeton International Equity SMA
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Templeton Global Equity Group Organizational Structure
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
As of March 31, 2020. Numbers in parentheses represent years of firm experience.¹These individuals have research roles spanning more than one team.²Count of 32 excludes investment team members that do not have formal research responsibilities.
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GLOBAL RESEARCH TEAM
GLOBAL AMERICAS ASIA EUROPE SMALL CAP ESG
Peter Nori (33)Director of Global Sector Research
Herbert Arnett (24)Craig Cameron¹ (7)
Alan Chua (19)Peter Moeschter (22)Matthew Nagle¹ (16)Katherine Owen (19)
Chris Peel (12)Warren Pustam¹ (7)Anthony Robinson
(3)Tina Sadler (22)
Derek Taner¹ (14)Joanne Wong (17)Maggie Wong¹ (12)
Matthew Nagle¹ (16)Director of
Americas Research
Doug Grant (<1)Warren Pustam¹ (7)Derek Taner¹ (14)
Heather Waddell¹ (23)
Paul de Josselin(19)
Director of Asia Research
Roman Aliev (5)Ferdinand Cheuk (3)
Mohan Kandiah¹(26)
Hsung Chen Khoo(3)
Clara Lee (7)Maggie Wong¹ (12)
Tian Qiu (23)Director of Europe
Research
Dylan Ball (13)John Reynolds (<1)James Windsor (12)
Harlan Hodes (18)Director of Small
Cap Research
Bhavesh Bombaywala¹ (20)Kyle Denning (<1)David Tuttle (17)
Heather Waddell¹(23)
Maggie Wong¹ (12)Katie Ylijoki (14)
Maarten Bloemen (18)
Director of ESG Research
Bhavesh Bombaywala¹ (20)
Craig Cameron¹ (7)Mohan Kandiah¹ (26)
32 PEOPLE, 1 PROCESS²
Templeton International Equity SMA
Large and Well-Organized Research Team
10For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
As of March 31, 2020. Note: Sector team leaders in blue boldface.CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
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ADDITIONAL RESOURCESResearchTechnology Group
Global Research Library
Junior Research Analysts
Investment Risk Management Group
ESG Resources
GlobalTrading Platform
Product ManagementGroup
Franklin Templeton Emerging Markets Equity & Templeton Global Macro
Herbert Arnett Global Communication Services
James Windsor European Communication Services
Hsung Khoo Asian Communication Services
Heather Waddell Small Cap Communication Services
Peter Moeschter Global IndustrialsAlan Chua Global Machinery
Doug Grant Americas IndustrialsDerek Taner Americas IndustrialsHeather Waddell Americas Industrials
Harlan Hodes Small Cap IndustrialsHeather Waddell Small Cap Industrials
Matthew Nagle Americas BanksEuropean Banks
Maggie Wong Global Real Estate
Dylan Ball European Financials
Paul de Josselin Asian BanksHsung Khoo Asian FinancialsMaggie Wong Asian Real Estate
Warren Pustam Americas Financials
David Tuttle Small Cap FinancialsMaggie Wong Small Cap Real Estate
Alan Bartlett, CIO
Japan
India
Katherine Owen Global Consumer Discretionary
Alan Chua Global Autos & Components
Joanne Wong Global Consumer Staples
Dylan Ball European Consumer Staples
Warren Pustam Americas Consumers
Harlan Hodes Small Cap Consumers
Ferdinand Cheuk Asian Autos
CONSUMERS
Derek Taner Americas Health CareGlobal Health Care
Craig Cameron Global Health Care
Tian Qiu European Health Care
Roman Aliev Asian Health Care
Kyle Denning Small Cap Health Care
HEALTH CARE
FINANCIALSTina Sadler Global Materials
Clara Lee Asian Materials
Tony Docal Americas Materials
David Tuttle Small Cap Materials
MATERIALSINDUSTRIALS
ENERGY COMMUNICATION SERVICES INFORMATION TECHNOLOGYPeter Nori Global Semiconductors
& Semiconductor Equipment
Warren Pustam Global Software & ServicesGlobal Technology Hardware & Equipment
James Windsor European Information Technology
Ferdinand Cheuk Asian Information Technology
Derek Taner Americas Information Technology
Katie Ylijoki Small Cap Information Technology
Chris Peel Global Energy
John Reynolds European Energy
Hsung Khoo Asian Energy
Bhavesh Bombaywala Small Cap EnergyDavid Tuttle Small Cap Energy
11
Templeton International Equity SMABottom-Up Stock Pickers: Global Focus Uncovers the Best Opportunities Across Sectors and Geographies
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
12
Templeton’s Valuation-Driven Investment Process
Templeton International Equity SMA
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
The above chart is for illustrative and discussion purposes only.1. Historical turnover is based on Templeton Global Equity Group’s overall experience, over a five-year period ended March 31, 2020, and is not intended to reflect the historical turnover of the strategy. Theturnover is a byproduct of Templeton’s long-term approach to managing portfolios, but various factors, such as a portfolio’s specific investment parameters and market or economic conditions may causeactual portfolio turnover to vary. For more information regarding an individual strategy’s or fund’s historical turnover ratio please contact your Franklin Templeton representative.
Identify Potential Bargains
In-Depth Fundamental Analysis
Research Team Evaluation
Bottom-Up Portfolio Construction
Portfolio Monitoringand Risk Management
Detailed industry analysis
Regional influences
Quantitative and qualitative assessment
Identify material ESG issues
Five-year financial forecasts
Management/supplier/competitive evaluation
Risk/Reward modeling
Recommendation of Bargain List candidates
Presentation of investment thesis
Investment debate and critique
ESG debate and critique
Research approval
Investment parameters
Industry and sector framework
Build and diversify portfolio
Long-term approach: 20% historical turnover1
Ongoing valuation analysis
Ongoing ESG monitoring
Disciplined sell methodology
Ongoing peer review and risk analytics
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TEMPLETON’S BOTTOM-UP STOCK SELECTION PROCESS
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Templeton International Equity SMA
Templeton's Valuation-Driven Investment Process
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
The above chart is for illustrative and discussion purposes only.
Bargain List
1. Identify PotentialBargains
• Analysts aligned by sectors,regions and marketcapitalization
• Unconstrained investableuniverse
• Fundamental andquantitative assessment– Price/Earnings– Price/Book Value– Price/Cash Flow
• Identify material ESG issues– Environmental– Social– Governance
• Most attractively valuedcompanies based on valuation
2. In-Depth FundamentalAnalysis
• Develop research models– Revenue drivers; growth
potential– Assessment of ESG factors
on long-term risk/return– Operating costs– Capital expenditures– Capital allocation– Retained capital– Competitor analysis
• Five-year financial forecasts– Emphasis on future earnings
potential– Cash flow potential
• Risk/Reward modeling– Central, best and worst case
• Recommendation ofBargain List candidates
3. Research TeamEvaluation
• Presentation ofinvestment thesis– Valuation history– Business outlook relative to
global industry– Why we believe business
is undervalued– Opportunities and risks– Capital strength appraisal
• Rigorous investmentteam debate– Team vetting generates our
best thinking– ESG debate and critique
• Research approval
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Templeton International Equity SMA
A Bottom-Up Research Process Leverages Global Capabilities Across Market Cap Spectrum
14For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Templeton’s research platform is designed to track securities through their valuation lifecycle. The above chart is intended solely to illustrate the ideal interplay between the Bargain List, Core List and Source of Funds List over an anticipated holding period but there is no guarantee any Templeton stock will follow this lifecycle. The chart is hypothetical and is not intended to represent an actual Templeton portfolio, or any stock purchased or sold by Templeton.
SOURCE OF FUNDS LISTFully valued stocks recommended for sale
CORE LISTAttractively priced stocks with potential
for significant price upside
BARGAIN LISTStocks priced at a significant discount to our estimation of their future business value
VALU
ATI
ON
TIME
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Templeton International Equity SMA
Lifecycle of a Templeton Stock
15For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
The above chart is for illustrative and discussion purposes only.The turnover is a byproduct of Templeton’s long-term approach to managing portfolios, but various factors, such as a portfolio’s specific investment parameters and market or economic conditions may cause actual portfolio turnover to vary. For more information regarding an individual strategy’s historical turnover ratio please contact your Franklin Templeton representative.Portfolio managers purchase securities from the approved Templeton database of 300–500 securities which was derived from the investable universe of approximately 10,000 equity securities. 1. Although the typical Templeton Global or Non-U.S. equity portfolio holds approximately 50-90 securities, individual portfolios may vary, depending on various factors, such as portfolio size or investmentstrategy.
Portfolio Manager Stock Selection Decisions & Oversight
Analysts’highest-conviction holdings per sector
Source of Funds List
Core List
Bargain List
Mandate parameters
Geographic/sector constraints
Portfoliocash flow
Consumer
Health Care
Financials
Communication
Utilities
Materials/Energy
Industrials
Info Tech
Historically low turnover, which may result in lower transaction costs
TEMPLETON GLOBAL OR
NON-U.S. PORTFOLIOApproximately
50-90 Securities1
SELL DISCIPLINE
Approved Database
Sector Analyst Portfolios
Framework of Sector Ranges
Portfolio-SpecificFeatures
300–500Securities
on Proprietary Database
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Templeton International Equity SMA
Bottom-Up Portfolio Construction—Step 4
16For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
The above chart is for illustrative and discussion purposes only.
Ongoing Valuation Analysis Disciplined Sell Methodology Integrated Risk Approach
Research team closely monitorsinvestment thesis including ESG factors and updates forecasts and recommendations:
• Sector Team Meetings—Meet monthly toreview main holdings, best ideas and sectoranalyst portfolios, discuss sector driversand trends, and vet potential new bargains
• Industry Reviews—Industry analysis reportsand stock holdings formally reviewed twicea year by each analyst to the full investmentteam
• Analyst Database Reviews—All stocksunder analysts’ coverage also formallyreviewed on a rotating weekly schedule
Stocks placed on the Source of Funds List and sold if:
• Price meets/exceeds our estimation offull value, or
• Greater value exists in another similarsecurity, or
• Fundamental change in our investmentthesis occurs
• Stock-specific risk is addressed primarilythrough our research discipline and teamvetting process
• Ongoing assessment of material ESGissues provides another way to quantifypotential downside risk
• Portfolio risk is managed through sector andgeographic diversification and ongoing peerreview process
• Investment Risk Management Group—anindependent team of risk specialistsreporting directly to the CEO—performs arisk oversight function and can consult withthe portfolio managers to provide unbiasedrisk insights
TEMPLETON GLOBAL EQUITY GROUP
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Templeton International Equity SMA
Portfolio Monitoring and Risk Management—Step 5
17For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Summary, Performance and Characteristics
Templeton International Equity SMA
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations. 18
This presentation is intended only as a general overview of the Templeton International ADR Equity SMA Strategy and is for informational purposes only and should not be construed or relied upon as investment advice. It has been
provided to the recipient for use in a private and confidential meeting to discuss a potential or existing investment advisory relationship and may not be reproduced or used for any other purpose. It is intended only for institutional
investment consultants or institutional investors. It is not meant for the general public. Information provided in this presentation is as of the date of this presentation, unless otherwise indicated.
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Templeton International Equity SMA
Summary
City of Sarasota Pension PlanAs of March 31, 2020
Investment Mandate Non-U.S Equity
Investment Style Value
Inception Date February 17, 1994
Benchmark MSCI All Country World ex-U.S. (Net Dividends) IndexMSCI EAFE (Net Dividends) Index
Total Net Assets (USD) 03/31/20 8,059,075.74
Total Net Assets (USD) 12/31/19 10,702,695.45
Summary of Investment Objective
The strategy seeks long-term capital growth by investing in the equity securities of companies outside the U.S., including emerging markets.
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Annualized Performance: Trailing Period Total Returns
“Past performance is not an indicator or a guarantee of future performance. Performance data is shown rounded to the nearest hundredth.
*Cumulative Total Returns
Templeton International Equity SMA
Historical Performance
City of Sarasota Pension Plan
As of March 31, 2020
Average Annual Total Returns (%)
InceptionDate 1 Mth* QTD* 1 Yr* 3 Yr 5 Yr 10 Yr 20 Yr
SinceIncept
City of Sarasota Pension Plan (gross of fees) 2/17/1994 -16.11 -24.58 -19.11 -5.82 -3.42 1.47 2.61 4.57
MSCI EAFE (Net Dividends) Index -13.35 -22.83 -14.38 -1.82 -0.62 2.72 1.99 3.87
MSCI All Country World ex-U.S. (Net Dividends) Index -14.48 -23.36 -15.57 -1.96 -0.64 2.05 2.42 N/A
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Templeton International Equity SMA
Performance Attribution by Sector (3 Months)
0.82
0.39
0.14
-0.04
-0.06
-0.22
-0.51
-0.57
-0.61
-0.67
-1.02
1.45
-1.5%
Materials
Utilities
Real Estate
Industrials
Consumer Staples
Health Care
Energy
Communication Services
Consumer Discretionary
Information Technology
Financials
Cash & Cash Equivalents
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Source: FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com. Allocation Effect is the portion of excess return attributed to sector allocation decisions. Selection Effect is the portion of excess
return attributed to security selection decisions within the sector and the product of the difference between the sector portfolio and index weight times the difference between sector portfolio and index return. Total Effect is the sum of the
Allocation and Selection Effects and represents the excess return by sector.
Past performance is not an indicator or a guarantee of future performance.
PORTFOLIO (%) INDEX (%) ATTRIBUTION EFFECTS (%)
Average
Weight Total Return
Average
Weight Total Return
Allocation
Effect
Selection
Effect Total Effect
Materials 9.08 -19.11 7.14 -27.50 -0.13 0.95 0.82
Utilities 5.17 -8.51 3.60 -15.87 0.08 0.31 0.39
Real Estate 3.11 -22.56 3.18 -27.60 -0.06 0.20 0.14
Industrials 10.14 -26.07 11.74 -26.26 -0.02 -0.02 -0.04
Consumer Staples 5.77 -9.77 9.72 -14.74 -0.43 0.37 -0.06
Health Care 13.31 -13.89 9.36 -9.16 0.59 -0.80 -0.22
Energy 10.14 -37.15 5.89 -38.45 -0.73 0.22 -0.51
Communication Services 9.52 -21.67 6.97 -14.13 0.20 -0.77 -0.57
Consumer Discretionary 5.30 -32.43 11.79 -24.13 0.01 -0.62 -0.61
Information Technology 8.16 -24.28 9.81 -17.44 -0.10 -0.56 -0.67
Financials 16.43 -39.89 20.81 -31.01 0.55 -1.57 -1.02
Cash & Cash Equivalents 3.86 0.28 -- -- 1.44 -- 1.45
Total Effect (%)
City of Sarasota Pension Planvs. MSCI All Country World ex- U.S. (Net Dividends) IndexJanuary 1, 2020–March 31, 2020
21
Templeton International Equity SMA
Performance Attribution by Sector (1 Year)
1.52
0.42
0.32
0.24
-0.27
-0.41
-0.53
-1.01
-1.24
-1.62
-1.63
1.11
-2.0% 0.0% 2.0%
Materials
Utilities
Real Estate
Industrials
Consumer Staples
Information Technology
Financials
Health Care
Consumer Discretionary
Communication Services
Energy
Cash & Cash Equivalents
PORTFOLIO (%) INDEX (%) ATTRIBUTION EFFECTS (%)
Average
Weight Total Return
Average
Weight Total Return
Allocation
Effect
Selection
Effect Total Effect
Materials 8.63 -4.31 7.34 -22.77 -0.07 1.60 1.52
Utilities 4.90 0.95 3.47 -8.92 0.06 0.35 0.42
Real Estate 0.90 -20.51 3.24 -25.92 0.15 0.18 0.32
Industrials 9.14 -12.73 11.86 -17.03 -0.07 0.30 0.24
Consumer Staples 5.43 -15.72 9.87 -9.85 -0.29 0.02 -0.27
Information Technology 6.92 3.71 9.04 1.28 -0.33 -0.08 -0.41
Financials 18.27 -31.85 21.44 -24.91 0.59 -1.12 -0.53
Health Care 15.29 -7.32 8.67 4.59 0.76 -1.77 -1.01
Consumer Discretionary 4.22 -29.56 11.52 -12.92 -0.27 -0.97 -1.24
Communication Services 11.35 -25.82 6.93 -9.95 -0.03 -1.59 -1.62
Energy 11.19 -40.98 6.61 -37.08 -1.03 -0.60 -1.63
Cash & Cash Equivalents 3.75 1.79 -0.95 1.12 -0.01 1.11
Total Effect (%)
City of Sarasota Pension Planvs. MSCI All Country World ex- U.S. (Net Dividends) IndexApril 1, 2019–March 31, 2020
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Source: FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com. Allocation Effect is the portion of excess return attributed to sector allocation decisions. Selection Effect is the portion of excess
return attributed to security selection decisions within the sector and the product of the difference between the sector portfolio and index weight times the difference between sector portfolio and index return. Total Effect is the sum of the
Allocation and Selection Effects and represents the excess return by sector.
Past performance is not an indicator or a guarantee of future performance.22
--
Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
0% 5% 10% 15% 20% 25% 30%
Health Care
Industrials
Financials
Energy
Information Technology
Communication Services
Materials
Consumer Staples
Consumer Discretionary
Utilities
Real Estate
Cash & Cash Equivalents
City of Sarasota Pension Plan MSCI All Country World ex-U.S. (Net Dividends) Index
Portfolio % Index % Over/Under
Health Care 15.09 10.50 4.59
Pharmaceuticals Biotechnology & Life Sciences 12.67 8.43 4.23
Health Care Equipment & Services 2.42 2.07 0.35
Industrials 12.89 11.40 1.49
Capital Goods 9.49 7.31 2.18
Transportation 3.40 2.56 0.84
Commercial & Professional Services -- 1.53 -1.53
Financials 12.45 19.21 -6.76
Banks 5.60 11.23 -5.62
Diversified Financials 4.06 2.96 1.10
Insurance 2.78 5.02 -2.23
Energy 8.89 5.22 3.67
Information Technology 8.31 10.18 -1.86
Semiconductors & Semiconductor Equipment 4.76 3.18 1.58
Technology Hardware & Equipment 3.56 4.05 -0.49
Software & Services -- 2.95 -2.95
Communication Services 8.18 7.48 0.70
Telecommunication Services 8.18 4.06 4.12
Media & Entertainment -- 3.43 -3.43
Materials 8.13 6.97 1.16
Consumer Staples 6.44 10.49 -4.05
Food Beverage & Tobacco 4.12 6.05 -1.93
Food & Staples Retailing 2.33 1.80 0.53
Household & Personal Products -- 2.64 -2.64
Consumer Discretionary 6.29 11.81 -5.52
Automobiles & Components 4.47 3.05 1.42
Consumer Services 1.82 1.31 0.51
Consumer Durables & Apparel -- 3.10 -3.10
Retailing -- 4.34 -4.34
Utilities 4.97 3.73 1.24
Real Estate 3.10 3.02 0.08
Cash & Cash Equivalents 5.26 -- 5.26
23
Templeton International Equity SMA
Sector Allocation
City of Sarasota Pension Plan vs. MSCI All Country World ex-U.S. (Net Dividends) IndexAs of March 31, 2020
0
All statements are opinions only and are expressed as of the publication date and are subject to change without prior notice. This is not a complete analysis of any industry, sector or region and should not be construed as an investment recommendation or advice.
Current Perspectives—Sectors
2895
Sector Opportunities Comments
Health Care MANY
Health care is an attractive defensive growth sector with strong idiosyncratic return characteristics, a large investable universe and high M&A activity. These features create significant optionality at the company level and a compelling opportunity set for fundamental stock-pickers. Key health care themes currently include: steady demand growth from aging developed market populations, strong per capita health care spending growth in emerging markets, improving innovation, and opportunities for companies capable of providing low-cost alternatives amid ongoing pricing pressures. We look for companies with what we view as undemanding valuations that are positioned on the right side of these themes.
Financials SOME
Our sector thesis was predicated on cheap valuations, sustainable dividends and expectations of a late-cycle environment where full employment would create inflationary pressures, leading to higher interest rates and better bank profitability. However, the market skipped that part of the cycle and moved straight into a recessionary environment. We reduced exposure (primarily to European banks), first in the autumn on strength and later as the implications of the COVID crisis on bank profits became more evident. Among our remaining holdings, we favor well-capitalized, well-managed banks with sound balance sheets, and strong competitive positions in stable markets trading at undemanding valuations.
Energy SOME
We have favored large integrated oil producers whose attractive dividends and improved capital discipline would help weather a downturn. We did not anticipate that a Russia-Saudi price war would compound the demand impact of a sudden global economic shutdown, decimating oil prices. As a result, we reduced our energy exposure amid recent turbulence in favor of beaten-down opportunities elsewhere that should help diversify portfolio value drivers with less commodity risk. We’ve long since cut exposure to leveraged and price-sensitive energy names, and are left holding primarily higher quality producers with adequate financial health and sufficient levers to weather a period of low prices with balance sheets and dividends intact. Such stocks could generate significant alpha should oil prices surprise to the upside.
Information Technology SOME
We have taken profits on a number of technology holdings that looked fairly valued and subject to risks associated with slowing revenue growth and greater regulatory scrutiny. With sector strength being driven by multiple expansion, not earnings growth, we’ve avoided high-flying stocks that looked vulnerable to a shift in sentiment. Instead, we’ve found opportunities among hardware companies with restructuring potential, semiconductor manufacturers pressured by supply concerns and mature software firms with healthy cash flows and new growth levers. More recently, we’ve used volatility to gain exposure to a handful of stocks that were excessively punished by end-market concerns.
Industrials SOME
Volatility has created opportunity throughout most parts of the sector, allowing us to broaden our exposure across electrical equipment, factory automation, shipping, diversified conglomerates, infrastructure and construction industries, among other areas. We have avoided expensive companies that failed to reflect the maturity of their business cycles. We have prioritized liquidity analysis in the capital-intensive sector, which the market clearly takes seriously given the sharp underperformance of leveraged industrials in Q1.
As of March 31, 2020
Templeton International Equity SMA
24
Current Perspectives-Sectors
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
1
All statements are opinions only and are expressed as of the publication date and are subject to change without prior notice. This is not a complete analysis of any industry, sector or region and should not be construed as an investment recommendation or advice.
2895
Sector Opportunities Comments
Communication Services SOME
Among telecoms, we look for lowly valued firms with strong balance sheets, declining capital intensity and attractive dividends operating in markets with stable competitive dynamics and regulatory structures. The sector’s defensiveness and yield profile should help in a low-rate, elevated risk environment, though valuation recognition may require a catalyst. The other part of this sector grouping—media andentertainment—is home to a number of tech, gaming and consumer stocks we have previously avoided on valuation grounds. However, recent volatility has begun to create opportunities among select media companies with quality franchises and strong competitive positions.
Materials SOMEWe increased exposure to quality chemicals and industrial gas firms offering strong economics with low cyclicality. We trimmed precious metals exposure on strength after gold broke out of a multi-year trading range, and are beginning to use volatility to initiate positions in industrial metals firms with sound balance sheets and good cost positions.
Consumer Discretionary SOME
We’re taking a barbell approach in the consumer discretionary sector. On the one hand, we’ve increased exposure to select retailers and even travel companies that appear oversold and are likely to survive the recession. On the other, we’ve initiated positions in some of the world’s highest quality, best-known consumer brands in recent months.
Consumer Staples FEW
The staples sector usually trades at a premium despite low margins, fierce competition and poor pricing power, making value opportunities highly specific and idiosyncratic. We’ve done well with some of the higher quality basic goods firms acquired in recent years, but are using positive volatility to re-size positions in search of better relative value.
Utilities FEWSome growth opportunities among renewable power providers, though the sector generally remains vulnerable to potentially weaker demand and increasing regulatory interference. Excess capacity in developed markets, combined with the sector’s bond-proxy status, create a poor combination of weak fundamentals and expensive valuations.
Real Estate FEW Few bargains in this late-cycle sector given expensive valuations and compressed cap rates. Idiosyncratic opportunities among mispriced Asian developers with catalysts.
Templeton International Equity SMA
Current Perspectives—Sectors (continued)As of March 31, 2020
25
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Templeton International Equity SMA
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Source: FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com. Allocation Effect is the portion of excess return attributed to region/country allocation decisions. Selection Effect is the portion of
excess return attributed to security selection decisions within the region/country and the product of the difference between the region/country portfolio and index weight times the difference between region/country portfolio and index return.
Total Effect is the sum of the Allocation and Selection Effects and represents the excess return by region/country.
Past performance is not an indicator or a guarantee of future performance.
1.31
0.64
0.63
0.58
0.28
-0.72
-0.84
-0.95
-1.03
-1.33
-1.5% 1.0%
Canada
Germany
Brazil
Australia
India
Japan
France
United Kingdom
Netherlands
China
Total Effect (%)
Performance Attribution by Country (3 Months)
City of Sarasota Pension Planvs. MSCI All Country World ex- U.S. (Net Dividends) IndexJanuary 1, 2020–March 31, 2020
PORTFOLIO (%) INDEX (%) ATTRIBUTION EFFECTS (%)
Average
Weight
Total
Return
Average
Weight
Total
Return
Allocation
Effect
Selection
EffectTotal
Effect
5 Largest Contributors
Canada 4.91 -5.12 6.64 -27.29 0.14 1.17 1.31
Germany 13.44 -18.98 5.57 -27.42 -0.21 0.86 0.64
Brazil -- -- 1.82 -50.40 0.63 -- 0.63
Australia -- -- 4.68 -32.40 0.57 -- 0.58
India -- -- 2.39 -31.13 0.28 -- 0.28
5 Largest Detractors
Japan 19.34 -21.86 16.28 -16.79 0.51 -1.22 -0.72
France 13.85 -31.39 7.22 -27.62 -0.30 -0.54 -0.84
United Kingdom 11.95 -32.46 10.40 -28.20 -0.18 -0.76 -0.95
Netherlands 3.90 -46.42 2.10 -21.68 -0.02 -1.00 -1.03
China 3.09 -22.20 10.20 -10.22 -0.99 -0.34 -1.33
26
Templeton International Equity SMA
Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Source: FactSet. Important data provider notices and terms available at www.franklintempletondatasources.com. Allocation Effect is the portion of excess return attributed to region/country allocation decisions. Selection Effect is the portion of
excess return attributed to security selection decisions within the region/country and the product of the difference between the region/country portfolio and index weight times the difference between region/country portfolio and index return.
Total Effect is the sum of the Allocation and Selection Effects and represents the excess return by region/country.
Past performance is not an indicator or a guarantee of future performance.
1.55
0.56
0.55
0.50
0.45
-1.00
-1.16
-1.30
-1.67
-2.25
-2.5% 0.0%
Canada
Australia
Brazil
Taiwan
India
Netherlands
Italy
United Kingdom
Japan
China
PORTFOLIO (%) INDEX (%) ATTRIBUTION EFFECTS (%)
Average
Weight
Total
Return
Average
Weight
Total
Return
Allocation
Effect
Selection
EffectTotal
Effect
5 Largest Contributors
Canada 4.07 15.77 6.77 -19.35 0.04 1.51 1.55
Australia -- -- 4.92 -25.53 0.56 -- 0.56
Brazil -- -- 1.90 -42.27 0.55 -- 0.55
Taiwan 2.94 21.92 3.08 1.27 0.01 0.49 0.50
India -- -- 2.35 -30.86 0.45 -- 0.45
5 Largest Detractors
Netherlands 4.23 -36.88 2.14 -5.76 0.14 -1.13 -1.00
Italy 3.52 -46.70 1.40 -19.60 -0.03 -1.12 -1.16
United Kingdom 12.15 -29.33 10.78 -22.15 -0.19 -1.10 -1.30
Japan 16.15 -19.47 16.26 -6.69 0.53 -2.19 -1.67
China 4.14 -37.80 8.92 -5.96 -0.90 -1.35 -2.25
Total Effect (%)
Performance Attribution by Country (1 Year)
City of Sarasota Pension Planvs. MSCI All Country World ex- U.S. (Net Dividends) IndexApril 1, 2019–March 31, 2020
27
Weightings as percent of total. Percentage may not total 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
.
Templeton International Equity SMA
Geographic Allocation
City of Sarasota Pension Plan vs. MSCI All Country World ex-U.S. (Net Dividends) IndexAs of March 31, 2020
28
Portfolio % Index % Over/UnderEurope 47.78 42.31 5.48Germany 15.03 5.46 9.57France 11.67 7.11 4.55United Kingdom 7.88 9.96 -2.09Switzerland 4.53 7.06 -2.53Italy 2.74 1.42 1.32Norway 2.29 0.36 1.94Netherlands 2.07 2.74 -0.67Ireland 0.93 0.37 0.55Denmark 0.64 1.44 -0.80Other -- 6.37 -6.37Asia 44.07 42.49 1.58Japan 24.68 17.36 7.32Hong Kong 6.28 2.47 3.81South Korea 5.61 3.28 2.33Taiwan 3.20 3.40 -0.21China 2.75 11.25 -8.50Singapore 1.54 0.79 0.75Other -- 3.93 -3.93North America 2.89 6.31 -3.42Canada 2.89 6.31 -3.42Australia / New Zealand -- 4.07 -4.07L. America/Caribbean -- 2.24 -2.24Mid-East/Africa -- 2.58 -2.58Cash & Cash Equivalents 5.26 -- 5.26
Emerging Markets Exposure 11.57 27.68 -16.110 15 30 45 60 75
Europe
Asia
North America
Australia/Nzl
L. America/Caribbean
Mid-East/Africa
Cash & Cash Equivalents
City of Sarasota Pension Plan MSCI All Country World ex-U.S. (Net Dividends) Index
Following the Nikkei Bubble of the late ’80s, companies that had previously pursued global leadership at all costs turned inward, becoming more pragmatic and conservative, strengthening balance sheets and focusing on improvements in efficiency and productivity. More recently, corporate Japan has been the subject of significant structural reforms designed to improve corporate governance, shareholder returns and business competitiveness. This is not lip service; these are government-mandated efforts that have the backing of both the Government Pension Investment Fund (the largest owner of Japanese equities) as well as foreign shareholders, who areincreasingly taking activist stakes and agitating for change. As a result, firms that already had solid balance sheets, leading technological capabilities and premier global brands are now undergoing deep structural reforms designed to improve returns on equity and shareholder value. While companies in many other parts of the world are entering this crisis with excessive leverage and/or expensive valuations, Japan looks comparatively cheap and well-positioned to begin reaping the benefits of historical prudence and ongoing reform.
European equities underperformed their global peers in the first quarter, both during the buoyant first half of the period and the calamitous second half. Europe continues to be haunted by its structural problems, with austerity controls and inadequate fiscalintegration looking decidedly out-of-step with the prevailing prescription of massive deficit spending to combat surging unemployment and an extreme deflationary shock. The fact that already-fragile southern European economies like Italy and Spain found themselves at the epicenter of the COVID-19 pandemic during the quarter didn’t help. Europe remains home to extremely attractive, lowly-valued multinational businesses, but shareholders will likely take a back-seat to stakeholders as this crisis unfolds. Capital will become more disadvantaged, both structurally and cyclically, but stock-pickers should find compelling opportunities in this environment given the number of high quality, well-managed companies likely to be punished indiscriminately by a regional valuation discount.
All statements are opinions only and are expressed as of the publication date and are subject to change without prior notice. This is not a complete analysis of any industry, sector or region and should not be construed as an investment recommendation or advice.
Current Perspectives—Regions
2896
As of March 31, 2020
0
Region Opportunities Comments
Japan MANY
Europe SOME
Templeton International Equity SMA
29
Current Perspectives-Regions
Many emerging markets were already dealing with weaker capital flows, declining commodity prices, dollar funding stress and domestic economic contraction before COVID-19. The pandemic began in Asian emerging markets and is hitting these economies hard given their foundational role in global supply chains. There is a limit to how much stress these markets can take before outflows, weaker currencies and low growth become destabilizing. The policy options available to EM policymakers are more constrained thandeveloped markets as their economies are typically more rigid and fiscal space is limited. It is encouraging to note, however, that several EMs have thus far been able to allow their currencies to adjust to the external shock while still lowering interest rates to support domestic liquidity. Valuation is a moving target in this environment, but on the whole EM equities look cheap and we continue to find selective opportunities among high quality companies with unique value catalysts in this environment.
Australia appears fully-valued, with an economy that is overly reliant on Chinese fixed asset investment and currently on the cusp of its first recession in nearly 30 years. Canada’s economy has some structural similarities given its concentration in the banking andcommodity sectors and over-reliance on demand from a neighboring economic giant (in this case, the US). However, valuations are somewhat more attractive, and we’ve found selective bargains among Canadian precious metals and energy firms in recent years.
Asia ex-Japan &
Emerging MarketsSOME
Australia & Canada FEW
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Holdings of the same issuer have been combined, unless otherwise noted. Information is historical and may not reflect current or future portfolio characteristics. All portfolio holdings are subject to change.
Templeton International Equity SMA
Top Ten Equity Holdings
City of Sarasota Pension PlanAs of March 31, 2020
30
Name of Issuer
1. E.ON
3. Taiwan Semiconductor Manufacturing
5. Takeda Pharmaceutical
6. Roche Holding
7. Sanofi
8. BAE Systems
9. Kirin Holdings
Total
10. Fresenius Medical Care
Country Industry % of Total
Germany Multi-Utilities 3.58
Germany Diversified Telecom Services 3.38
Taiwan Semiconductors & Semiconductor Equipment 3.20
France 3.04
Japan Pharmaceuticals 2.97
Switzerland Pharmaceuticals 2.92
France Pharmaceuticals 2.86
United Kingdom Aerospace & Defense 2.77
Japan Beverages 2.74
29.88
Germany Health Care Providers & Services 2.42
Oil Gas & Consumable Fuels4. Total
2. Deutsche Telekom
Management Profiles
Templeton International Equity SMA
31For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
ANDREW BURKLY, CFAInstitutional Portfolio ManagerTempleton Global Equity GroupTempleton Investment Counsel LLCFort Lauderdale, Florida, United States
Andrew Burkly is an Institutional Portfolio Manager, working closely with the Portfolio Managers and Research Analysts of the Templeton Global Equity Group (TGEG). In his role, Mr. Burkly is responsible for effectively communicating the TGEG investment philosophy, process and current strategy to clients, prospects, and intermediaries in the marketplace.
Mr. Burkly has over 15 years of professional experience in the investment industry where he has gained extensive knowledge of global capital markets, asset allocation and portfolio construction.
Prior to joining the Templeton Global Equity Group, he was Head of Portfolio Strategy at Oppenheimer Asset Management in New York City and responsible for providing macroeconomic, asset allocation and bespoke portfolio overlays to institutional and private clients. Previous to Oppenheimer, he worked at Brown Brothers Harriman in New York City as Director of Research and Chief Investment Strategist.
Mr. Burkly holds an M.B.A in Finance from Texas A & M University, Mays Graduate School of Business and a B.A. in Economics, from San Diego State University. He is a Chartered Financial Analyst (CFA) and a member of the New York Society of Security Analysts.
Templeton International Equity SMA
Management Profile
32For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
BRIAN BRENNEMAN Vice PresidentSenior Advisor Consultant Franklin Templeton Distributors, Inc. San Mateo, California, United States
Brian Brenneman is a vice president and senior advisor consultant representing Franklin Templeton in west central Florida. As a trusted business partner, he brings valuable perspective to financial advisors in the areas of practice management, asset allocation and portfolio construction. Brian supports financial advisors and their clients in their pursuit to reach their long-term investment goals.
He began his career in the financial services industry when he joined Franklin Templeton Investments in 1994. As an advisor to the advisor, Brian is a resource for all of Franklin Templeton’s investment solutions, including mutual funds, separately managed accounts, 529 plans and insurance products.
Brian is a FINRA registered representative and holds the Certified Investment Management Analyst® designation. He earned a Bachelor of Science in Finance from University of South Florida and currently resides in Parrish, Florida with his wife, Karen, and son, Trevor.
Templeton International Equity SMA
Management Profile
33For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Appendix
Templeton International Equity SMA
34For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
As of March 31, 2020.
Collaboration with Financial Experts Across Franklin Templeton
2894
Analysts and Portfolio Managers in 16 Locations
Analysts and Portfolio Managers in over 20 Locations
TEMPLETON GLOBAL EQUITY35 Analysts, Portfolio Managers
Expertise on Macroeconomic and Currency Trends
Generates Accurate, Relevant and Timely Performance and Investment Risk AnalyticsConsultants and Analysts in 19 Locations
Perspective and Insights on Local Business Conditions and Economic and Political Risks
0
Templeton International Equity SMA
35For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Collaboration with Financial Experts Across Franklin Templeton
Risk Management—Templeton Global Equity Group
2898
Templeton maintains a robust, multi-faceted risk management process throughout its organizational structure.
Levels of Risk Management:Templeton Philosophy and Process
Templeton applies a long-term, bottom-up, value investment philosophy• Long-term view allows us to use volatility to our advantage over a secular
investment horizon• Rigorous, bottom-up analysis determines normalized business value• Search for significant valuation discount to help reduce downside risk
Equally important is the process by which Templeton’s philosophy is implemented• Analysts bring their best ideas to our global investment team• Investment debate & critique attempts to identify potential flaws in the thesis
• Portfolios are diversified in an effort to help reduce stock-specific risk• Frequent communication ensures portfolios reflect convictions
Core: Templeton Global Equity Group (GEG)
Dedicated Risk Review Corporate Risk CommitteesInvestment Risk Management Group• A team of specialized risk professionals reporting directly
to Franklin Templeton’s CEO• Generates accurate, relevant and timely performance and
investment risk analytics• Oversees the strategy’s performance against guidelines,
company policies and industry standards
• The Complex Securities Review Committee helps PMsunderstand the risks associated with more esoteric securities
• The Counterparty Credit Committee (CCC) assessesrisks posed by banks and brokers that act as our tradingpartners
• These two Franklin Templeton committees that assessand manage portfolio risk have been in place sincebefore the most recent Global Financial Crisis
Complementary: Investment Risk Management Group Complementary: Franklin Templeton (FT)
CorporateRisk
Committees (FT)Investment
Risk Management
GroupTempleton
Philosophy & Process (GEG)
Templeton International Equity SMA
36For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
Risk Management—Templeton Global Equity Group
Trade Execution and Implementation• Integrating trading and overlaying informed execution on top of investment decisions may provide opportunities for increased investment
performance by maximizing market insight, relationships, trading strategies and technologies
An Integrated Global Trading Platform
2899
GLOBAL TRADINGPLATFORM
IMPLEMENTATION
AND
EXECUTION
Present trading ideas and strategies
Suggest timing and manage liquidity
Filter and present potentially opportunistic information
Actively seek to reduce trading costs
Seek to decrease impact and opportunity costs of trading
Coordinate and foster collaboration
Manage and seek to optimize commissions
Understand the daily market dynamics
Templeton International Equity SMA
37For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
An Integrated Global Trading Platform
38
Templeton International Equity SMA
Important Disclosures
For Use with Financial Professionals and Clients in Consultation with their Financial Professional in One-on-One Presentations.
© 2020 Franklin Templeton. All rights reserved.
CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.
Indexes are unmanaged, and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges.
All MSCI data is provided “as is.” The portfolio described herein is not sponsored or endorsed by MSCI. In no event shall MSCI, its affiliates or any MSCI data provider have any liability of any
kind in connection with the MSCI data or the portfolio described herein. Copying or redistributing the MSCI data is strictly prohibited.