Will New Actively Managed International ETFs Shift Franklin Resources' (BEN) Product Strategy Narrative?

• Earlier this month, Franklin Templeton announced the launch of two new actively managed international equity ETFs, the Putnam International Stock ETF, managed by Putnam Investments, and the Templeton International Insights ETF, managed by Templeton Global Investments, each offering distinct approaches to investing outside the United States.
• This development draws on Franklin Templeton's extensive global research platform and broadens its ETF lineup to over 70 funds, totaling more than US$50 billion in ETF assets under management worldwide.
• We'll examine how the addition of these actively managed international ETFs supports Franklin Resources' push for product diversity and global growth.

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Franklin Resources Investment Narrative Recap

For those considering Franklin Resources, the core thesis centers on the company’s ability to expand and capture non-US capital flows through product innovation, particularly in international and alternative strategies, while managing the ongoing challenges of fee pressure and net outflows. The launch of two new actively managed international equity ETFs materially supports its diversification strategy, though in the near term, the company’s ability to arrest outflows at key subsidiaries and stabilize revenue remains the most relevant catalyst, with fee compression still a critical risk that these launches alone may not fully offset.

Among recent developments, Franklin Templeton’s introduction of tax-aware long-short strategies on the Canvas platform stands out, as it relates directly to the pursuit of higher value-added offerings that could attract new inflows and differentiate the firm from passive competitors. These product advancements align with efforts to boost organic growth, but their impact will be measured against ongoing challenges in asset retention and pricing power.

However, investors should also be aware that, despite expanding its ETF lineup, Franklin continues to face fee compression and margin pressure that could...

Read the full narrative on Franklin Resources (it's free!)

Franklin Resources is projected to generate $8.9 billion in revenue and $1.4 billion in earnings by 2028. This reflects a 1.0% annual revenue growth rate and an increase in earnings of about $1.1 billion from the current earnings of $270.9 million.

Uncover how Franklin Resources' forecasts yield a $25.45 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community contributors estimate Franklin Resources’ fair value from US$23.40 to US$29.92 across 3 analyses. While some see room for upside, persistent net outflows remain a key concern and may influence future performance, so explore additional viewpoints from the Community.

Explore 3 other fair value estimates on Franklin Resources - why the stock might be worth as much as 28% more than the current price!

Build Your Own Franklin Resources Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Franklin Resources research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Franklin Resources research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Franklin Resources' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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