Welcome back. You're watching our continuing coverage here from Davos 2026 at the World Economic Forum's annual summit. We've been bringing you global business leaders to present an outlook for 2026 on the most pressing issues. Joining me now is someone who is one of the most respected influential voices in the world of finance. Jenny Johnson of Franklin Templeton, the global co also of course a big supporter and a believer in the India story. Jenny, it's great to have you back here. Thanks very much for joining us on CNBC TV8.
Well, let's start with the global outlook for growth at this point in time. IMF pegging it at 3.2% so it's pretty steady. And India of course 7.3 for this year and 6.4 for FY27 and FY28. On balance with all the uncertainty and volatility and the tariff threats and so on and so forth. What do you make of where the global economy is and what that would mean then as far as markets go?
So first of all I'm bullish on the US. I do think that President Trump, we have midterm elections coming in and he is going to make sure that that economy stays strong through the midterms. So you have that tailwind. I also think you know AI and we haven't seen any real benefits yet from AI in the broader sectors right the investments have all been about the picks and shovels the Nvidias the Microsofts others that's just at the very beginning people say well the energy next is going to be the next big investment but what's really going to be differential and meaningful is as companies start to leverage AI to improve their business and so I'm bullish on that. India of course I mean the big benefit honestly India has is very much a domestically driven economy, right? So you kind of with all the geopolitical issues going on, India's kind of isolated. Tariffs affected a little bit, but really the India story is all about your consumer and I've been a fan of India. I lived in Hyderabad in 2005 with my family. My kids went to school there. My daughter's managed to get into a Bollywood movie. So, you know, I've got the full plenty of India connections.
Did she enjoy that, by the way?
Oh, she loved it. She of course she loved it. But you know it's a country where 56% of the population is under the age of 25. I tell people when I talk about the India story and I say you know you got to understand this is a British-based legal system. So it's a legal system that people understand it's a from an education system I think Americans are surprised when I tell them that Harvard is a safety school to IITs unbelievable graduates that come out engineering and others. So the India story is so powerful. There is a saying that India grows at night while the government sleeps. But I think your current government has done a really good job of actually being supportive of growth in the environment. So I'm very bullish on India.
Well, it's 30 years for Franklin Templeton in India. So you know what is the plan for Franklin in India in terms of assets under management and the kind of growth that you anticipate?
Well, actually it's been we had we launched four products. We had one of our best years ever in sales. We've had eight consecutive quarters of positive sales. We actually launched one of the first private credit funds. So we're excited about that. And we have a license in Gift City, so we're going to take advantage of that. You know, our view is it's such a great dynamic market. You know, we have clients in 160 countries. We have local asset management. We're sort of unique of a multinational manager that has local asset management. I think a lot of Indians look at Franklin Templeton as a local company. And it's because we spent the time we brought the SIP to India.
My first SIP was Franklin Templeton.
There you go. And to give you an idea of how significant they are, SIPs, I think in the last 5 years have grown from, you know, something like 800 million a year or it might even be a month to 3.3 billion. I mean, you know, in India, it's such a great story and it's a great way to save. So we're very bullish. Fixed income equities. We love the India story.
But you know what about fund flows because FIIs have kind of been reluctant in investing in India especially in the last year or so and we've seen FIIs pulled money out of India and FDI has had its own issues but that's not just India specific but it's also the global environment what do you anticipate as far as fund flows are concerned?
Look I think so it depends if you're talking about external fund flows into India I think that there were a couple things I think some people thought maybe it got expensive but you've seen a little bit of correction there you still have pretty supportive monetary and fiscal policy. I think there's a lot of pro-growth initiatives that are going to be positive for the India story where it's funny it's the fastest growing economy of all the large economies. So those are amazing tailwinds. Now sometimes depending on the currency you know the dollar has been weakened and so it depended on sort of where you were investing from whether or not you saw it as a it was going to be positive or negative. But again I look at it and say just fundamentally the demographics and the dynamics of India are such that it is a really attractive place and that's why we wanted to set up a license in Gift City. We are going to tell the India story. We have a local asset management team and to be able to attract the foreign.
So what are you going to do from Gift City exactly?
Well, so we're building products that foreign investors will be interested in. You know it's a way to actually get access to the Indian market. So we are launching several different some global equity products you also can have investors send money out so it allows us to take our broader suite of products and be able to offer them to Indian investors as well.
Well, you've come to Davos fresh off a crypto conference, Jenny. What's that world looking like?
So, it's interesting. So, Franklin Templeton has been very I think forward on tokenization probably before most traditional asset managers. We actually started our journey probably in 2017. We had a tokenized money market fund approved by the SEC in 2020. It's one of the I think it may be the only one that's natively on chain. Others are what are called digital twins, which mean they're copied onto the blockchain. Well, if you're a digital twin, you don't get the benefit of the blockchain, which is we can run this. We actually calculate the yield every second in the money market fund. So, if you're a hedge fund and you use us as collateral, and you only own it for 4 hours, 22 minutes, and 32 seconds, you will actually get paid that yield. You will be able to transact within the next few weeks, be able to transact on a Saturday and move into a stable coin. Now, why do I love tokenization? It is simply a programming language that does some really cool things. So one is it has a record of who has ownership. Huge cost in financial services reconciliation of your own data across your in your systems. Then you have to reconcile with your counterparty. It eliminates that. There's only one source of truth. It has the ability to put in to program a smart contract. So whatever types of investment agreement that we have, we can actually program that in. And then finally, it has a payment mechanism. So you're going to have atomic settlement. You're not going to have to wait to get for your money after your transaction settles. And my favorite example of that I think highlights what the opportunities are is Rihanna. It didn't really work, but it still gives you I think insight in what is coming. So Rihanna created NFTs where if you bought one, you got the royalty rights to 0.000033% royalties to one of her biggest songs. So why can she do that? Because when the streaming service plays her song, the smart contract kicks off and it says, 'Oh, you know, you're a Rihanna fan. You have the token in your wallet. I owe you this fraction of a cent for that one stream.' Think about how that opens up other types of investment opportunities. So, we think it's going to be really exciting to see this space evolves. And when you combine AI and the smart contract is going to be hugely powerful.
So, you know, will 2026 then end up being some sort of an inflection year as far as tokenization is concerned?
