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Why invest in technology now?

We believe the current rapid advancement and adoption of technology will drive sustained super-normal growth.

The Generative AI Supercycle

We expect digital transformation to fuel long-term growth in technology and believe Artificial Intelligence could unlock trillions of dollars over the next decade. The investment potential of this transformational shift, both within and beyond the technology sector, is likely not yet fully recognized in the market.

Earnings/revenue growth acceleration in 2025

We believe tech sector earnings and revenue growth are poised to accelerate in coming quarters. Companies are making significant and increasing investments in technology to enhance productivity, while technology companies themselves are also becoming more efficient.

Valuations remain compelling

The technology sector, excluding mega caps Apple, Nvidia and Microsoft, is trading at valuations below prior historical averages.1 We have also seen tech profit margins nearly double over the past 12 years2, reflecting strong business models with recurring revenue streams. The sector also has high net cash compared to other sectors – this allows flexibility for research & development (R&D) to help drive future growth initiatives.

1. As of September 30, 2024, The IT sector trades at a 42% premium to the S&P 500 but only 10 percent when excluding Microsoft, Apple and Nvidia from the index. The sector has typically traded at 15% premium to the S&P 500 of the past 25 years. (confirm data for this time period)
2. Source: Bloomberg as of December 2023. 

Why Franklin for your technology investment?

Tomorrow’s technology winners will be different from today’s. Our late-stage venture capital investments provide insights into innovative new technologies and industry disruptors, often well ahead of our peers. This can help us see “what’s next” in technology and identify companies positioned to be market leaders both now and in the future.”

Technology is a dynamic and rapidly evolving industry. Identifying tomorrow’s winners requires:

  • a willingness to understand and invest in early stage-companies
  • insight into how new technologies will disrupt incumbent winners
  • patience to see the disruption play out

The Franklin technology team is uniquely positioned to tap into this:

  • We have a large, experienced team, located in Silicon Valley and already trusted with more than US$11 billion in client money
  • We invest in early-stage tech companies, including pre-listing, private companies
  • We have a long-term investment philosophy with only an 18% turnover ratio

Consistently strong performance

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The chart has 1 Y axis displaying 1-year rolling returns. Data ranges from -40.2 to 54.7.
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Past performance does not predict future returns.
Source: Morningstar Direct, as at 30 April 2024 . Fund performance data is shown net of fees. Returns in USD. The fund's full performance can be found: https://www.franklintempleton.co.uk/our-funds/price-and-performance/products/4916/T/franklin-technology-fund/LU0260870158. The fund’s returns may 
increase or decrease as a result of changes to foreign exchange rates.

Deep expertise in the technology sector – meet the team

Franklin Templeton’s location in Silicon Valley and the San Francisco Bay area gives our team unparalleled access to many of the world’s largest and leading technology companies, research universities and venture capital firms. This can help us see investment opportunities and technology-driven disruption before the broader markets.

Our portfolio managers draw from the expertise of 16 analysts dedicated to technology and communications, with an average of 16+ years of industry experience. 

Headquartered in the middle of the Silicon Valley, the team is located in the proximity of leading technology companies, research universities and Venture Capital firms. This access helps to see investment opportunities and technology-driven disruption before the broader markets.

Experienced sector experts conduct in-depth research and provide industry coverage across all market caps and styles.


Our sector experts conduct in-depth fundamental research and provide industry coverage across the full market capitalization spectrum. We invest in companies that are creating, implementing or commercializing new technologies and consider broad-based secular themes that we think will contribute to future growth, including:

  • AI
  • Cloud computing
  • Future of work
  • New commerce
  • Digital media transformation
  • The internet of things (IoT)

 

Hear the latest from our team in our quarterly technology update

Resources

Discover the Franklin Technology Fund
Award-winning strategy managing over US$11 billion.

★ ★ ★ ★
Morningstar Overall  Rating™, as of 30/06/2024*

Fund Information

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*Morningstar ratings are applied at share class level, which means that each share class requires 36 monthly returns before it will be awarded a rating. Copyright - © 2024 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Fund Risks

Equity risk: prices of equities may be affected by factors such as economic, political, market, and issuer-specific changes. Such changes may adversely affect the value of the equities regardless of company-specific performance.

Liquidity risk: the risk that arises when adverse market conditions affect the ability to sell assets when necessary. Such risk may be triggered by (but not limited to) unexpected events such as environmental disasters or pandemics. Reduced liquidity may have a negative impact on the price of the assets.

Securities Lending risk: the risk that default or insolvency of the borrower of securities lent by a Fund may lead to losses if collateral received realises less than the values of securities lent.

Complete information on the risks of investing in the Fund are set out in the Fund’s prospectus.

Important Legal Information

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This fund meets the requirements under Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR); the fund has binding commitments in its investment policy to promote environmental and/or social characteristics and any companies in which it invests should follow good governance practices. 

Further information in relation to the sustainability-related aspects of the Fund can be found at franklintempleton.lu/SFDR. Please review all of the fund's objectives and characteristics before investing.

The information provided on this page does not constitute or form part of an offer for shares or an invitation to apply for shares. Subscriptions of shares in FTIF can only be made on the basis of the latest available audited annual report accompanied by the current prospectus of FTIF and, where available, in the relevant Key Investor Information Document. No shares of FTIF may be directly or indirectly offered or sold to residents of the United States of America. Shares of FTIF are not available for distribution in all jurisdictions and prospective investors should confirm availability with their local Franklin Templeton  representative before making any plans to invest. Any research and analysis contained in this report has been procured by Franklin Templeton for its own purposes. It is provided to you for information only. References to particular industries, sectors or companies are for general information and are not necessarily indicative of a fund's holding at any one time.

There is no guarantee that the Fund will achieve its objective. For a free copy of the latest prospectus, the SID, the relevant KIID, the annual report and semi-annual report, if published thereafter or for more information about any Franklin Templeton fund, UK investors should contact: Franklin Templeton, Telephone: 0800 313 4049, Email: [email protected] , or write to us at the address below. Alternatively, the information can be downloaded from our website http://www.franklintempleton.co.uk

Performance figures above are total return in the share class currency. Performance figures represent the aggregated total return for the period indicated assuming, where relevant, the reinvestment of dividends & distributions. Past performance is no guarantee of future performance. Changes in the rates of the currency exchange may cause values or performance in the alternative currency to fluctuate.

Past performance does not predict future returns. Current performance may differ from figures shown. Investment return and principal value will fluctuate with market conditions, and you may have a gain or loss when you sell your shares.

Performance shown may include periods prior to the Fund’s inception date, reflecting performance of a predecessor fund with a substantially similar investment objective and policy and whose assets were transferred into this Fund's at inception. The performance data should be used for illustrative purposes only, as performance prior to the inception date has not been adjusted to reflect the fees of the Fund.

An investment in the Fund entails risks which are described in the Fund’s prospectus and the relevant Key Investor Information Document where applicable. In emerging markets, the risks can be greater than in developed markets. Investments in derivative instruments entail specific risks that may increase the risk profile of the fund and are more fully described in the Fund’s prospectus and in the relevant Key Investor Information Document where applicable.

For more information on any of our funds, contact your financial advisor or download a free prospectus. Investors should carefully consider a fund's investment goals, risks, sales charges and expenses before investing. The prospectus contains this and other information. Please read the prospectus carefully before investing or sending money.

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For the avoidance of doubt, if you make a decision to invest, you will be buying units/shares in the Fund and will not be investing directly in the underlying assets of the Fund.