SOURCE: Franklin Templeton

Franklin Templeton

March 29, 2011 09:00 ET

Global Investment Interest Increases Worldwide; Mexicans Bullish on Global Markets, Less Optimistic on Home Market Opportunity

Majority Have Misperceptions About Stock Market Performance, According to Franklin Templeton Global Investor Sentiment Survey

MEXICO CITY--(Marketwire - March 29, 2011) - Enthusiasm for global markets is on the rise. The Franklin Templeton Global Investor Sentiment Survey found that half of respondents plan to invest outside their home country in 2011. Those numbers increase over the long term, with 62 percent of all respondents planning to invest in global markets over the next 10 years.

In the first of its kind global survey of 13,076 people in 12 countries, 60 percent of global respondents think their own country's stock market will increase in 2011. Yet, only 33 percent believe it will perform better compared with the rest of the world, illustrating a willingness to consider opportunities in the global marketplace. 

"With an improved global economic outlook, investors are increasingly looking worldwide for investment opportunities," said Greg Johnson, president and chief executive officer of Franklin Templeton Investments. "A diversified portfolio today is no longer just a mix of asset classes but also a mix of geographies."

Mexico Perception vs. Reality

It is also notable that in Mexico, a majority of respondents have a false perception of how stock market investments fared last year. Survey results indicate that 70 percent of those surveyed believe the stock market was either flat or down in 2010, versus the 20.02 percent gain that the Mexican stock market (the Mexican IPC index - Indice de Precios y Cotizaciones) actually reported.

By comparison, the Brazilian stock market index (Indices Bovespa Stock Prices, or IBOV) gained 1.4 percent over the same period while the Chilean stock market index (Indice General De Precios de Acciones or IGPA) gained 38.17 percent.

There is also a disconnect between where Mexican survey respondents identify the best investment opportunities and their planned behavior over the next 10 years. While nearly 90 percent (90% for equities, 87% for fixed income) of respondents believe the best investment opportunities lie outside of Mexico, only 71% said they plan to invest outside their domestic market in the next 10 years.

"Mexican survey respondents recognize that there is an opportunity that exists in global markets in the coming year and over the next decade," said Hugo Petricioli, Country Head, Franklin Templeton Investment Services (Mexico). "What they seem to be missing, however, is recognition of the opportunity that exists with equity investing. These survey findings also underscore the need for investor education and professional guidance. As a global investment manager, with more than 30 offices around the world and clients in 150 countries, we are uniquely positioned to identify investment opportunities in developed and emerging markets and navigate risk in today's interconnected world."

Mexico vs. the World

Although less than a quarter (22 percent) of survey respondents from Mexico said the global economy has improved, they are still seeing investment opportunities outside their own country. Over the next 10 years, 71 percent of survey respondents said they plan to invest outside their domestic market. This planned shift to global markets is coupled with the uncertainty respondents have about the performance of their own stock market in 2011.

When looking at countries interviewed in Latin America, Mexican respondents were least likely in this region to say their domestic stock market (the IPC Index) will increase this year (only 57% indicated this). This is compared to 81% of Brazilian respondents and 79% of Chilean respondents who believe the same about their domestic stock markets in 2011. 

The findings also showed that 40 percent of respondents from Mexico currently own real estate investments and more than a quarter (29 percent) expect real estate to outperform the other asset classes (precious metals, currencies, non-metal commodities, stocks, bonds and derivatives) over the next 10 years.

Respondents from Mexico also take a shorter-term view on their investments and evaluate the success of an investment opportunity over an average of two years as compared to the global average of three years.

Only two in five (38 percent) of survey respondents in Mexico have invested in a mutual fund. Of those who have done so, nearly half (48 percent) believe that mutual funds are best suited for meeting long-term needs. Among those who have never invested in a mutual fund, a third (34 percent) have not done so because they are not familiar with mutual funds.

Emerging vs. Developed Markets

The survey found stark regional differences in opinion on whether the best investment opportunities exist in emerging versus developed markets. A majority of those in Asia (86 percent) and Latin America (61 percent) believe the best investment opportunities over the next 10 years will be found in emerging markets. Europeans are almost evenly split with 53 percent looking to emerging markets, while in the U.S. and Canada, only 37 percent believe emerging markets are going to provide the best returns in the decade ahead. 

Methodology

The Franklin Templeton Global Investor Sentiment Survey, conducted by ORC International, an Infogroup company, included responses from 13,076 individuals in 12 countries: Brazil, Chile and Mexico in Latin America; Hong Kong, India, South Korea and Singapore in Asia; Germany, Italy and the UK in Europe, and the U.S. and Canada in North America. Survey respondents were between the ages of 18 and 64 in all countries, except in the UK and U.S. where survey respondents were 18 years of age and older. Surveys were completed from January 6 to 17 in all countries except the U.S. where the survey was completed from January 6 to 7. Data were weighted to make the results representative in each country.

About Franklin Templeton

Franklin Templeton Investments open its Mexico City office in October 2005, and transitioned to a local asset management company (Franklin Templeton Asset Management México S.A. de C.V. Sociedad Operadora de Sociedades de Inversión) beginning operations in January 2009, reflecting the company's commitment to, and confidence in the continued growth of the Mexican market. Today, Franklin Templeton Asset Management México S.A. de C.V. Sociedad Operadora de Sociedades de Inversión distributes mutual products through a select group of distributors licensed in Mexico.

Franklin Templeton has been present in Latin America for nearly 20 years. The company opened its first regional office in 1995. In addition to Mexico City, we have offices today in Rio de Janeiro, Sao Paulo and Buenos Aires. Franklin Templeton mutual funds have been investing in the region since the early 1980s.

Franklin Resources, Inc. (NYSE: BEN) is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and approximately $693.7 billion in assets under management as of February 28, 2011. For more information, please visit www.franklintempleton.com.mx

This material does not constitute investment advice or an invitation to apply for securities. Investors should seek professional financial advice and obtain a full explanation of any proposed investment before making a decision to invest. Investments involve risks. The value of investments can go down as well as up, and investors may not get back the full amount invested.

Copyright © 2011. Franklin Templeton Investments. All rights reserved.

Contact Information

  • Contact:
    Franklin Templeton Investments Services (Mexico)
    Alejandro Stieglitz
    + 52 55 5002 0681
    Email Contact