―

―

― ―

$18,988

$16,464

$18,012

$15,109

$5,000

$10,000

$15,000

$20,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Equity Market Drawdown Franklin Quotential Bal Growth Port F S&P/TSX Composite TR

FTSE Canada Universe Bond CPI +2%

Source: Franklin Templeton Capital Market Insights Group, MSCI, Bloomberg, Macrobond. Important data provider notices and terms available at www.franklintempletondatasources.com

$29,732

$29,733

$25,864

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020

Index 60/40 MSCI ACWI Bloomberg Barclays Global Aggregate

•

•

―

―

Global 3 month Benchmark Government Yields

June 1990 – August 2020

-5.0

0.0

5.0

10.0

15.0

Australia Brazil Canada China France Germany Japan Russia Switzerland UK US

Yield Range (30 Year) Mean [Mean -30y] Last

-3.0

0.0

3.0

6.0

9.0

12.0

15.0

18.0

Australia Brazil Canada China France Germany Japan Russia Switzerland UK US

Yield Range (30 Year) Mean [Mean -30y] Last

Source: Franklin Templeton Capital Market Insights Group, Macrobond. Important data provider notices and terms available at www.franklintempletondatasources.com

Global 10 Year Benchmark Government Yields

June 1990 – August 2020

Source: Franklin Templeton Capital Market Insights Group, Macrobond. Important data provider notices and terms available at www.franklintempletondatasources.com

0

2

4

6

8

10

12

14

16

18

1950 1957 1964 1971 1978 1985 1992 1999 2006 2013 2020

% Y

ield

Source: Franklin Templeton Capital Market Insights Group, Macrobond, Fed, as of August 31, 2020. Important data provider notices and terms available at

www.franklintempletondatasources.com

Note: Not all of the alternatives investments are equity-like.

Source: Calculations by the Franklin Templeton Capital Market Insights Group using data sourced from the U.S. Board of Governors of the Federal Reserve System, Financial

Accounts of the Unite States, and Pew Analysis of State Financial Reports, as of December 31, 2017.

0

10

20

30

40

50

60

70

80

90

100

1954 1964 1974 1984 1994 2004 2014 2015 2016 2017

Perc

enta

ge A

llocation (

%)

Equity & Alternatives Fixed Income and Cash

-100

-80

-60

-40

-20

0

20

40

60

80

1001

93

6

193

8

194

0

194

2

194

4

194

6

194

8

195

0

195

2

195

4

195

6

195

8

196

0

196

2

196

4

196

6

196

8

197

0

197

2

197

4

197

6

197

8

198

0

198

2

198

4

198

6

198

8

199

0

199

2

199

4

199

6

199

8

200

0

200

2

200

4

200

6

200

8

201

0

201

2

201

4

201

6

201

8

Corr

ela

tion (

%)

Source: Franklin Templeton Capital Market Insights Group, Macrobond, Morningstar Research Inc., S&P Dow Jones, Federal Reserve,

IA SBBI LT Government TR Index = Ibbotson Associates Stocks, Bonds, Bills and Inflation Long-Term Government Total Return Index, as of December 31, 2019.

-0.5

0

0.5

1

1.5

2

2.5

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Per

cent

United States Canada Euro Area 19 Germany France United Kingdom Japan South Korea

Source: Franklin Templeton Capital Market Insights Group, OECD, Macrobond, Important data provider notices and terms available at www.franklintempletondatasources.com

•

•

•

-30

-20

-10

0

10

20

30

May-05 Apr-07 Mar-09 Feb-11 Jan-13 Dec-14 Nov-16 Oct-18 Sep-20

Year

over

Year

Change (

%)

M2 Velocity M2 Money Supply

0.15 0.23

1.36 1.48 1.59

1.05 1.130.80 0.63 0.69 0.70 0.55

1.34 1.18

5.39

0

1

2

3

4

5

6

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

US

D, T

rillio

ns

Unites States, Financing, Marketable Borrowing, U.S. Department of Treasury, Marketable Borrowing Estimates, Estimate, USD

During the July –

September 2020

quarter. Treasury

expects to borrow

$947 billion in

privately-held net

marketable debt

During the October

– December 2020

quarter, Treasury

expects to borrow

$1.216 trillion in

privately-held net

marketable debt.

-4

-2

0

2

4

6

8

10

1998 2000 2002 2004 2007 2009 2011 2013 2016 2018 2020

Pro

port

ion

of G

loba

l GD

P (

%)

PBoC ECB BoJ BoE FED Other CB:s Total

Source: Franklin Templeton Capital Market Insights Group, RBA, BCB, StatCan, Central Bank of Denmark (Denmark's Nationalbank), ECB, Central Bank of Iceland, RBI, BOJ, BNM, BANXII. Important data provider notices and terms available at www.franklintempletondatasources.com

― ―

Hypothetical Scenario Y/C Shift Full Period*3yr Avg Annual

Return**

5yr Avg Annual

Return**

7yr Avg Annual

Return**

Rates marginally higher,

slow-flation

+ 30bps

(10yr finish 1%)-0.2% 0.2% 0.4%

Rates higher, inflation normalizes+ 180bps

(10yr finish 2.50%)-4.5% -2.1% -1.0%

Rates much higher, robust

inflation, oversupply concerns

+ 330bps

(10yr finish 4.00%)-8.9% -4.4% -2.5%

Exhibit 10: Rising yield scenarios

Source: Franklin Templeton.Barra *Assumes starting yield of 0.70% ** Annualized return with rebalancing annually, as of September 30, 2020

Hypothetical Scenario10yr Level at Market

Crash Start

Price Return with

Fall to 0.50%

Price Return with

Fall to 0.00%

Price Return with

Fall to -0.50%

Low starting point for

10yr yield10yr at 1% 4.9% 9.7% 14.6%

Moderate starting point for

10yr yields10yr at 2.50% 19.4% 24.3% 29.1%

High starting point for

10yr yields10yr at 4.00% 34.0% 38.8% 43.7%

Source: Barra, as of September 30, 2020

Exhibit 11: Falling yield scenarios

Source: Franklin Templeton Multi-Asset Solutions, data updated on an annual basis, table based on most current data available

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.01

99

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

Retu

rn %

60/40 Equity Market Drawdowns MSCI ACWI GR USD

Source: Franklin Templeton Capital Market Insights Group, Macrobond

-60

-50

-40

-30

-20

-10

0

10

20

30

9/1/2000 -10/9/2002

10/9/2007 -3/9/2009

4/23/2010 -7/2/2010

4/29/2011 -10/3/2011

7/20/2015 -8/25/2015

11/3/2015 -2/11/2016

1/26/2018 -2/8/2018

9/20/2018 -12/24/2018

2/19/2020 -3/23/2020

Perc

ent

US Equities US Gov Bonds

Source: Franklin Templeton Capital Market Insights Group, SPDJI, Bloomberg, Macrobond. Important data provider notices and terms available at

www.franklintempletondatasources.com

Source: Franklin Templeton Capital Market Insights Group, Macrobond, BUBA, ECB, BoC. Opinions expressed are those of FTMAS and subject to change without

notice. Important data provider notices and terms available at www.franklintempletondatasources.com, as of September 30, 2020

-1

-0.5

0

0.5

1

1.5

2

0 5 10 15 20 25 30

Per

cent

Years

United States Japan Euro Australia Canada

Bond Market Region10 year

Starting Yield

Price Return with

ending level of 0.50%

Price Return with

ending level of 0.00%

Price Return with

ending level of -0.50%

Australia 0.89% 3.4% 7.8% 12.1%

US 0.69% 1.8% 6.7% 11.5%

Canada 0.60% 0.9% 5.5% 10.1%

UK 0.23% -2.3% 2.0% 6.3%

Japan 0.04% -4.5% 0.4% 5.3%

Germany -0.43% -9.4% -4.3% 0.7%

Source: Barra, as of September 30, 2020

High Growth

High Inflation

Real Assets; Real Estate,

Timberland, Farmland, Energy

Low or Falling Growth

High or Rising Inflation

Inflation-Linked Bonds;

Commodities; Infrastructure

High Growth

Low Inflation

Equity

Corporate Debt

Low Growth

Low Inflation or Deflation

Cash

Government Bonds

Low Growth Economic Growth High Growth

Lo

w

Gro

wth

Lo

w

Gro

wth

Lo

w

Gro

wth

Estate

Planning

Investment

and Risk

Management

Investment

Planning

RIS

K M

AN

AG

EM

EN

T

PLA

NN

ING

AN

D IIN

VE

ST

ME

NT

S

Retirement

Planning

Goal

Setting

Cash Flow

Analysis

Education

Planning

Tax

Optimization

Health

Care

Critical

Insurance

Disability

Insurance

Life

Insurance

Long-Term

Care

Investor

Advisor

Investors who work with an

advisor accumulate 270% more

assets after 15 years than

investors who go it alone

Source: CIRANO, “An Economic Analysis of Value of Advice in Canada,” 2012

•

•

•

•

•

IMPORTANT LEGAL INFORMATION

The material is intended to be of general interest only and should not be construed as investment advice, recommendation or solicitation to buy, sell, hold

any security, or adopt any investment strategy. It does not constitute legal or tax advice.

The views expressed are those of the author and the comments, opinions and analyses are rendered as of August 4, 2020 and may change without notice.

The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. All

investments involve risks, including possible loss of principal.

Data from third party sources may have been used in the preparation of this material and Franklin Templeton (“FT”) has not independently verified,

validated or audited such data. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments,

opinions, and analyses in the material is at the sole discretion of the user.

Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as

local laws and regulation permits. Please consult your own financial professional or Franklin Templeton contact for further information on availability of

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Franklin Templeton Multi-Asset Solutions is a business name used by Fiduciary Trust Company of Canada.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus or

fund facts document before investing. The indicated rates of return are historical annual compounded total returns including changes in unit value and

reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security

holder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. The

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