- Public Market Outperformance: 50% of mutual funds, ETFs, and composites outperformed peers/benchmarks across all time periods in 2025.
- Private Markets Momentum: Raised $22.9B in private markets, advancing toward a $100B 5-year fundraising goal with $270B in alternative AUM.
- Tokenized AUM Growth: Digital and tokenized assets surged 75% to $1.7B in 2025, driven by blockchain innovation and a first-to-market tokenized money market fund.
- Distribution Strength: Retail SMA, ETF, and Canvas AUM grew by 13%, 56%, and 71% YoY, with SMA CAGR of 21% since 2023.
- Private Wealth Positioning: Fiduciary Trust is primed to benefit from the $84T intergenerational wealth transfer expected by 2045.
Business Performance
The company's investment performance has been strong, with over 50% of its mutual funds, ETFs, and composites outperforming peers and benchmarks across all standard time periods. Private markets fundraising reached $22.9 billion, keeping the company on track to meet its 5-year $100 billion fundraising goal. The company's SMA business has grown at a 21% compound annual rate since 2023, driven by record positive net flows in retail SMAs, ETFs, and Canvas.
Growth Prospects
Franklin Templeton is well-positioned to capitalize on the trend favoring active management, with a strong foundation in public and private markets. The company expects to expand its alternatives business, with a target of $25 billion to $30 billion in fundraising for fiscal year 2026. The Lexington flagship fund is expected to reach a target size of around $25 billion, with a first close expected in the first half of 2026.
Valuation
With a P/E Ratio of 37.06 and a Dividend Yield of 5.76%, Franklin Templeton's valuation suggests that the market is pricing in a certain level of growth. The company's ROE of 2.5% and ROIC of 0.75% indicate that it is generating returns on equity and invested capital, although the Net Debt / EBITDA ratio of 8.25 may be a concern. The P/B Ratio of 0.94 suggests that the company's stock may be undervalued relative to its book value.
Outlook
For fiscal year 2026, Franklin Templeton expects its adjusted effective fee rate to remain stable, with higher growth in lower fee categories offset by higher fee alternative asset flows. The company anticipates revenue growth of around 4.6%, according to analyst estimates. With a strong foundation in place, Franklin Templeton is entering fiscal 2026 with clear momentum and excitement about the opportunities ahead.