The multi-decade investment horizon strategy meets client requirements for sustainable long-term returns. Three long-term mega trends of Demographic Changes, the Future of Technology, and Resource Scarcity guide the team’s proprietary fundamental research and portfolio construction.
Franklin International Long-Term Unconstrained
Strategy Overview
The Franklin International Long-Term Unconstrained (ILTU) strategy invests in 20-40 quality growth companies and aims to provide long-term growth over a 5-10-year investment horizon.
Quality growth companies possess hard-to-replicate competitive advantages, characterized by low disruption risk, pricing power, and high management quality. We believe these companies can deliver long-term growth through their compounding potential.
We apply proprietary fundamental research to identify high quality companies that have been mis-priced by the market yet have sustainable growth potential. We take a concentrated, flexible approach to investing and consider portfolio construction with equal importance to the research process. We seek to manage risk on an absolute basis and invest without reference to any specific index.
Mega trends identify long-term structural growth
Rigorous, proprietary systematic and fundamental research
Using a stringent, repeatable investment process, we seek to find undervalued, quality growth companies offering high and sustainable returns on invested capital. We systematically risk assess a company against four categories: Industry, company, governance and sustainability, and portfolio risks.
Differentiated portfolio construction to manage risk and harness growth potential
The strategy offers diversification from index-based strategies. Companies are selected for their growth potential from diverse geographic revenues, maturities and exposure to long-term investment themes – not country or sector weightings. This aids the portfolio’s diversity, risk management and potential capture of long-term growth.
Our Philosophy
Our investment philosophy is founded on a belief that the market is myopic and fades returns of quality companies too fast. Our proprietary fundamental research framework is able to identify these companies that are undervalued due to market inefficiencies to find the best investment ideas. Combining this approach with active stock picking is how we seek excess returns from stock alpha over the long-term for our clients.
Our Investment Process
Our investment process is designed to exploit inefficiencies inherent in the market by identifying high quality businesses with sustainable growth at attractive valuations. We use a systematic three-step process of idea generation, in-depth fundamental research and portfolio construction to build conviction at every stage, resulting in a diversified and balanced portfolio.
- Idea generation. We use a proprietary screening process to identify quality growth companies that can generate sustained profits, demonstrated by an ability to consistently generate a Return on Invested Capital (ROIC) in excess of their Weighted Average Cost of Capital (WACC).
- In-depth fundamental research. Our fundamental analysis conducts a risk assessment across four key areas: industry, company, governance and sustainability and portfolio risks. This framework ensures we focus on the stock’s risk reward potential across all relevant fields. ESG is integrated throughout the process.
- Portfolio construction. Offers diversification from index-based strategies. Companies are selected for their growth potential from diverse geographic revenues/profits, business models and exposure to long-term investment themes – not country or sector weightings. Our risk-based approach to investing ensures we can deliver a truly stock driven portfolio of 20-40 of our best ideas
This is a general depiction of the investment team’s methodology and may not reflect the exact investment process for any particular strategy.
Portfolio Construction & Management
- We consider portfolio construction with equal importance to the research process. We focus on five areas – long-term thematics, company classifications, geographic revenue/profit, end user markets and industry lifecycles.
- These aid our understanding of the portfolio’s diversity, effectively manage risk and help ensure we are positioned to capture long-term growth.
Management Team
The Franklin International Long-Term Unconstrained strategy is managed by a dedicated and highly experienced investment team. Our investment team takes a collaborative approach to investing designed to optimize the decision-making process. In addition, the team has access to the Franklin Equity Group’s full complement of research analysts and centralized resources. This team-inclusive approach results in a thoroughly researched portfolio of only the highest conviction ideas.
Zehrid Osmani
Head of Global Long-Term Unconstrained
Robbie McNab, CFA
Senior Portfolio Manager
Sam Cottrell, CFA
Portfolio Manager
WHAT OUR MANAGERS THINK
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Contact Us
Please connect with us to learn more about our investment capabilities and how we can help meet your investing needs.
Footnotes
1. This is the fund managers’ current thinking and may be subject to change.
Important Legal Information
All investments involve risks, including possible loss of principal. Generally, those offering potential for higher returns are accompanied by a higher degree of risk. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability, and political developments. Investments in emerging markets involve heightened risks related to the same factors and are less liquid.
There is no assurance that the employment of this strategy will result in the investment objective being achieved. Various account minimums or other eligibility qualifications apply depending on the investment strategy or vehicle.
The information contained on this webpage is intended only as a general overview of Franklin Templeton investment capabilities and is for informational purposes only and should not be construed or relied upon as investment advice.
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice.
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