Why Franklin Templeton’s CEO Says Now Is the Time to Stay Invested in Stocks

In a year marked by geopolitical tensions, fluctuating interest rates, and market volatility, Franklin Templeton’s CEO Jennifer M. Johnson has issued a clear message: “It’s not the time to get out of stocks.” Her stance, rooted in decades of market experience and Franklin Templeton’s strategic vision, emphasizes the enduring opportunities in equities—even amid uncertainty.

The Case for Staying Invested in Equities

Johnson’s argument hinges on three pillars: market dispersion, active management’s edge, and long-term structural trends. Let’s break them down.

1. Market Dispersion Creates Opportunities

Johnson highlights that earnings growth is the key driver of equity valuations, particularly in the U.S., which she calls the “likely leader” for global returns. While broader indices may fluctuate, dispersion—the widening gap between top and underperforming stocks—creates opportunities for active managers to identify undervalued assets.

For instance, Franklin Templeton’s large-cap value strategies and listed infrastructure funds have attracted $12.5 billion in net inflows in 2025 (Q1 data), outperforming passive benchmarks. Johnson argues that this dispersion isn’t a temporary anomaly but a new normal shaped by technological disruption and geopolitical shifts.

2. Active Management as a Shield Against Volatility

Johnson dismisses the notion that investors should “panic sell” due to short-term noise. Instead, she points to Franklin Templeton’s track record: two-thirds of its mutual fund assets outperformed peers over three years, driven by disciplined research and risk management.

“Active managers aren’t just picking stocks—they’re solving problems,” she said, referencing the firm’s AI-driven “goals optimization engine,” which dynamically allocates assets to meet client-specific objectives. This technology, paired with human expertise, allows portfolios to adapt to macro shifts like rising rates or inflation.

3. Structural Trends Favor Equity Investors

Beyond near-term volatility, Johnson identifies four megatrends that justify staying invested:

• Infrastructure Demand: Global aging infrastructure and green energy transitions are creating multi-trillion-dollar opportunities. Franklin Templeton’s recent acquisition of Putnam Investments (2024) and its focus on infrastructure debt aim to capitalize on this.
• AI-Driven Innovation: The firm’s partnership with Microsoft to develop AI tools for personalized investing underscores the tech’s potential to streamline portfolios and uncover hidden gems.
• Global Income Needs: With bond yields constrained, dividend-paying equities (like those in Franklin’s Income Fund) remain critical for yield-seeking investors.
• Geopolitical Resilience: While China’s tech sector faces U.S. sanctions, Johnson advises selective exposure to its domestic growth sectors and talent pools.

Navigating Risks: A Balanced Approach

Johnson isn’t blind to risks. She acknowledges challenges like U.S. debt dynamics and trade tensions, but argues these are already priced into markets. A key data point: Franklin Templeton’s $475 billion in non-U.S. assets provides geographic diversification, shielding portfolios from regional downturns.

The Bottom Line: Stay Engaged, Stay Active

Johnson’s message is clear: exiting stocks entirely would mean missing the next leg of growth. With active management outperforming passive strategies, structural tailwinds in tech and infrastructure, and disciplined risk management, equities remain a cornerstone of long-term portfolios.

Conclusion: Data-Backed Confidence

Franklin Templeton’s performance metrics and strategic moves back Johnson’s stance. Consider:
- $1.58 trillion AUM underpin investor trust.
- $900 million in Canvas platform inflows reflect demand for customizable, tech-driven equity exposure.
- Infrastructure and AI investments align with a $120 trillion global infrastructure gap (World Bank, 2025) and the $45 billion AI market projected by 2030.

As Johnson noted in her earnings call: “History shows that markets reward those who stay invested through cycles.” In 2025, that means embracing active management, sector-specific opportunities, and a long-term mindset.

Stay invested. Stay dynamic. Stay informed.