Global Investment Management Survey

Summary

This bi-annual outlook survey is designed to give a view across our investment teams. The Franklin Templeton Institute identifies the median across answers and develops commentary on the year ahead. We surveyed our investment teams across all our asset classes: equity, private equity, fixed income, private debt, real estate, digital assets, hedge funds and secondary private markets.

The goal of the Global Investment Management Survey is to provide the most comprehensive global view on the dimensions that matter most to our clients.

The findings reflect the average of the group. While each of our investment teams are independent and have different outlooks, the survey serves as a starting point in understanding Franklin Templeton’s aggregate views on the economy, equities, fixed income and alternatives.

The survey results outlined in this paper are as of May 2026, and the market data is as of May 31, 2026.

Exhibit 1: Expectations for 2026 Based on the Franklin Templeton Global Investment Management Survey

Focus on Quality Across All Asset Classes

Source: Franklin Templeton Institute Global Investment Management Survey expectations are for the year 2026 and are as of May 2026. Survey methodology included at the end of the paper.

Key takeaways

Economic growth accelerating

Global growth will be slightly better than consensus forecasts.
We expect core Personal Consumption Expenditure (PCE) to approximate 3.0%–3.5% and will likely remain above central-bank targets.
Unemployment will rise but remain relatively low in the United States and will end the year around 4.5%.
The US dollar will remain rangebound and essentially unchanged by the end of 2026.
We do not expect a recession in 2026.

Equities likely to end 2026 at 7400–7800 (S&P 500 Index target)

Earnings will grow 15%+ versus market consensus of 22.8%.

FAVOR

Broad US stock exposure: we favor large-, mid- and small-cap and a balanced mix of growth and value. We are bullish on emerging markets and Japan.
Sector focus on technology, industrials and energy.
Factors to focus on include free-cash-flow yield, return on invested capital and return on equity.

RISKS

Geopolitics, Federal Reserve (Fed) misstep and earnings below expectations.

Municipal bonds, short duration and corporate credit will benefit from solid fundamentals and elevated yield levels in 2026

FAVOR

Municipal bonds will continue to be a high-quality, diversifying investment with attractive tax-free yields, as fundamentals remain solid and elevated supply levels continue to be met with strong demand to support valuations.
Shorter duration fixed income will be in favor during most of 2026 as yields remain elevated and the Fed could be on hold.
High-yield bonds are attractive. Default rates for high-yield debt could tick slightly higher during the second half of 2026; however, spreads should remain relatively tight in a sector with low interest rate risk and high all-in yields.

RISKS

Geopolitics and potential missteps by the Fed or other major central banks.

WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal.

Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls.

Equity securities are subject to price fluctuation and possible loss of principal.

Investments in lower-rated bonds include higher risk of default and loss of principal. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value.

International investments are subject to special risks, including currency fluctuations and social, economic, and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.

Alternative strategies may be exposed to potentially significant fluctuations in value.

Privately held companies present certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity.

Real estate securities involve special risks, such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments affecting the sector.

Because municipal bonds are sensitive to interest-rate movements, a municipal bond portfolio’s yield and value will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in an investment portfolio adjust to a rise in interest rates, the portfolio’s value may decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer, or guarantor, may affect the bond’s value.

Dividends may fluctuate and are not guaranteed, and a company may reduce or eliminate its dividend at any time.

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The data, comments, opinions, estimates and other information contained herein may be subject to change without notice. There is no guarantee that an investment product will meet its objective and any forecasts expressed will be realized. Performance may also be affected by currency fluctuations. Reduced liquidity may have a negative impact on the price of the assets. Currency fluctuations may affect the value of overseas investments. Where an investment product invests in emerging markets, the risks can be greater than in developed markets. Where an investment product invests in derivative instruments, this entails specific risks that may increase the risk profile of the investment product. Where an investment product invests in a specific sector or geographical area, the returns may be more volatile than a more diversified investment product. Franklin Templeton accepts no liability whatsoever for any direct or indirect consequential loss arising from use of this document or any comment, opinion or estimate herein. This document may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

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