Blockchain

Franklin Templeton CEO on bitcoin: Fueling the next real opportunity in the blockchain world



Franklin Templeton President and CEO Jenny Johnson joins ‘Squawk Box’ to discuss the firm’s spot bitcoin ETF offering, latest market trends, the Fed’s rate path outlook, and more.

CONFIDENCE ABOUT THE ECONOMIC CYCLE AND WHAT THE FED’S GOING TO DO IN RESPONSE TO IT. >> STICK WITH MARKETS HERE. A SPECIAL GUEST THIS MORNING. JENNY JOHNSON PRESIDENT AND CEO OF FRANKLIN TEMPLETON, $1.5 TRILLION ASSETS UNDER MANAGEMENT. THE 76-YEAR-OLD FIRM ONE OF

ROUGHLY DOZENS TO LAUNCH A SPOT ETF LAST WEEK AFTER THE FCC GAVE THE GO AHEAD. GREAT TO HAVE YOU HERE ON-SET. >> THANKS FOR HAVING ME. >> MASSIVE INFLOW EXPECTED IN EARLY DAYS. WHAT DO YOU EXPECT AS TIME MOVES ON, AND WHO ARE THE INCREMENTAL

INVESTORS IN THIS ETF, IN YOUR VIEW? >> FUNNY. I’M KNOWN FOR SAYING BITCOIN IS THE GREATEST DISTRACTION FROM ONE OF THE GREATEST DISRUPTIONS IN FINANCIAL SERVICES, BLOCKCHAIN. PEOPLE TOOK THAT AS I’M NOT A BELIEVER IN BITCOIN. YET LAUNCHING THIS ETF YOU CAN

SEE OBVIOUSLY DEMAND OUT THERE FOR BITCOIN. I THINK A LOT OF REASONS WHY THAT IS. I THINK THAT, ONE, FROM A BLOCKCHAIN STANDPOINT, THE ABILITY TO PAY. BITCOIN IS GOING TO BE A KEY COMPONENT OF THAT, AND THE TECHNOLOGY IS GOING TO OPEN UP A

LOT OF REALLY INTERESTING TECH INVESTMENT OPPORTUNITIES. WE ACTUALLY LAUNCHED AND TOKENIZED MONEY MARKET FUND. THE FIRST MUTUAL FUND D– FIRST TO LAUNCH A 40-ACT FUND ON A PUBLIC ON A STELLAR BLOCKCHEYNE. BITCOIN IS ONE OF OPPORTUNITIES HERE AND ONE THING THAT MADE ME A BELIEVER.

AS I WENT AROUND THE WORLD TALKING TO PEOPLE WHO WOULD TELL YOU, SOMEBODY SAID, I KEEP 50% OF MY SAVINGS IN BITCOIN, BECAUSE IF I SAVE THE WRONG THING IN MY COUNTRY, I COULD HAVE MY ASSETS CONFISCATED. I REMEMBER TALKING TO SOMEBODY

IN ISRAEL WHO SAID, MY PARENTS AND THEIR PARENTS HAD ALL OF THEIR ASSETS CONFISCATED AND THEY KEEP A PORTION IN BITCOIN. A FEAR COMPONENT TO IT. THAT’S CONSIDERED ALMOST AN INSURANCE OR SAFETY COMPONENT. I ALSO THINK IT’S REALLY IMPORTANT TO FUELING WHAT IS A

NEXT REAL OPPORTUNITY IN THIS BLOCKCHAIN WORLD. >> RIGHT. THIS NARRATIVE YOU OUTLINED, THAT’S THE CASE HOLDING BITCOIN, THE ACTUAL, YOU HAVE THE KEYS TO THE SECURITY AS OPPOSED TO INVESTING IN AN ETF? RIGHT. THERE’S A USE CASE FOR BOTH. >> FOR SURE.

STILL KEEPS A FLOOR ON THE PRICE. RIGHT? FLOOR ON THE PRICE. IF YOU’VE ACTUALLY TRIED TO ACQUIRE ANDDEAL WITH THE KEYS IT’S COMPLICATED. RIGHT? I DID IT AT ONE POINT AND WAS TRYING TO ACTUALLY FIGURE HUE TO GET BACK IN. IT’S HARD.

BEING ABLE TO OPEN IT UP, HAVE ACCESS THROUGH ETF AND SIMPLY THROUGH YOUR ACCOUNT IS A MUCH BETTER WAY TO ACCESS IT. >> WHAT’S YOUR TAKE, PIVOTING BACK TO THE MARKETS HERE. WHAT’S YOUR TAKE WHAT WE’VE SEEN SO FAR IN 2024, AND IF I TOLD

YOU THAT THE FED WAS ONLY GOING TO, YOU KNOW, CUT TWO TIMES AS OPPOSED TO SIX OR WHATEVER THE MARKET HAS PRICED IN RIGHT NOW, DOES THAT MAKE A DIFFERENCE TO YOUR OUTLOOK FOR THE YEAR? >> SURE. ACTUALLY I THINK, MY VIEW, BEEN

SAYING THIS FOR A WHILE. I THINK THE MARKET’S A LITTLE OVERLY EXUBERANT WHAT THEY THINK CUTS WILL BE. YOU JUST SAW THE ATLANTA FED SAY WAGES ARE 5.2%. RETAIL SALES HIGHER THAN EXPECTED. I THINK THERE’S SOMETHING LIKE 1.4 JOBS AVAILABLE FOR EVERY 1. THAT BECOMES AVAILABLE A FLOOR

TO INFLATION. SO I THINK THAT THE MARKET’S EXCITED. I DON’T THINK WE’LL GET CUTS UNTIL SECOND HALF OF THE YEAR AND THEY’RE IT CUT 50 TO 75 BASIS POINTS TOTAL. >> OF THE TRILLION AND A HALF ON MANAGEMENT, SORRY TO PUT YOU ON THE SPOT.

HOW MUCH IN MONEY MARKETS, HOW MUCH ARE THEY EARNING AND HOW LONG STAY IN MONEY MARKETS? WHERE’S IT GO NEXT? >> I’M GOING TO BALLPARK — >> I KNOW I PUT YOU ON THE SPOT. >> PROBABLY $60 BILLION WESTERN ASSET MANAGEMENT AND FRANKLIN. MONEY MARKET FUNDS IN TWO

PLACES. EARNING 5.1%. >> NOT MUCH IN MONEY MARKETS RIGHT NOW? >> WELL — >> MORE THAN IT WAS, BUT — >> STILL DECENT, YOU KNOW, $60 BILLION. I GUESS IT’S ALL IN PERSPECTIVE. >> RIGHT. WHERE DOES IT GO? DO YOU SEE THAT, SOMETHING LIKE, WHAT’S THE NUMBER, MIKE?

$8 TRILLION, OUT IN THE ECONOMY? >> MORE LIKE — IN TERMS OF SAVINGS, DEPOSITS, YEAH. >> IS THAT FUEL FOR THE MARKET — >> 100%. WELL, IS IT FUEL FOR THE STOCK MARKET OR FUEL FOR ALSO LONGER DURATION FIXED INCOME?

AND SO — YES, CASH ON THE SIDE IS ALWAYS AN OPPORTUNITY. YOU KNOW, THE MARKET OBVIOUSLY, IF RATES COME DOWN, THAT’S A GOOD THING FOR STOCKS. BUT I ALSO THINK BECAUSE WE’VE SEEN THIS GREAT CONCENTRATION. I MEAN, THE MAGNIFICENT SEVEN

ARE NOW 31% OF, YOU KNOW, THE MARKET CAP, AND HAVE BEEN 70% OF RETURN AT THE PEAK OF THE DOTCOM BOOM, 26.5%. ACTUALLY A GREATER CONCENTRATION NOW. I ACTUALLY THINK, WHERE’S THE OPPORTUNITY? THE OPPORTUNITY’S GOING TO BE IN OTHER AREAS, IT’S BROADENING. SURE, HASN’T HAPPENED YET.

WE’RE ALL A LITTLE SURPRISEED BUT I THINK IT’S INEVITABLE FOR IT IT TO HAPPEN. >> IN TERMS OF YOUR BUSINESS, THE WAY YOU ADDRESS CLIENTS, THEIR PREFERENCES? I MEAN OBVIOUSLY ALL THE FLOWS ON A NET BASIS HAVE BEEN TOWARDS ETFs. MORE THAN TRADITIONAL FUND STRUCTURES.

EVEN IN I GUESS, THE RETIREMENT AREA THAT’S BEEN A DIFFERENCE. BUT HOW DO YOU COMPETE IN THAT WORLD? >> SO, LOOK, OUR VIEW WHAT IS OUR EXPERTISE? IT’S MAKING ACTIVE INVESTMENT DECISIONS. WE WILL DELIVER THEM IN ANY VEHICLE WHICH OUR CLIENT WOULD LIKE TO RECEIVE THEM.

SO YOU’LL GET THE SAME STRATEGY OR SIMILAR STRATEGY IN A MUTUAL FUND AN ETF, SEPARATELY MANAGED ACCOUNT, CO-INVESTMENT OR COLLECTIVE INVESTMENT TRUST. WE’RE AGNOSTIC TO HOW THAT STRATEGY IS DELIVERED. AND SO ETFs ARE OBVIOUSLY YOU SEE IT, A VARIETY REASONS WHY A

PART OF THAT, AS THE WORLD WILLIAM’S MOVED FEE-BASED, WHAT USED TO BE SERVICES FEEING IN MUTUAL FUNDS NOW CHARGED A THE ACCOUNT LEVEL CHANGED TO A BIG PUSH INTO ETFs. PEOPLE OFTEN TALK ABOUT IFs SYNONYMOUS WITH PASSIVE INVE INVESTING. PATTIVE MUTUAL FUNDS. YOU NO YOU

44 Comments

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