Masters in Business – Franklin Templeton's Ed Perks on Fixed Income Investing

Host: Barry Ritholtz (Bloomberg)
Guest: Ed Perks, CIO Franklin Templeton Income Investors
Air Date: March 6, 2026

Episode Overview

Barry Ritholtz interviews Ed Perks, a veteran investor and current Chief Investment Officer for Franklin Templeton Income Investors. The discussion explores Ed’s unique career trajectory, his investment philosophy, and detailed perspectives on today’s fixed income landscape, multi-asset strategies, and major risks and opportunities for income investors. Ed shares insights gained from decades at Franklin Templeton, covers macroeconomic factors, diversifying across asset classes, and how the role of income investing has evolved.

Career Path and Early Influences

Ed Perks’ background and path to Franklin Templeton

• Ed graduated from Yale with a BA in Economics and Political Science, initially considering law or government.
• “It certainly wasn’t finance… I wanted to experience a different part of the country.” (Ed Perks, 03:09)
• His accidental entry into finance began with a move to San Francisco in the early 1990s and landing at Franklin Templeton during a period of explosive growth.

Early roles and the benefit of cross-asset experience

• Started in marketing research, then moved to research analyst after completing a CFA exam.
• Exposure to credit, convertibles, and equities solidified his approach:

  “Buying things that trade at reasonable valuations that might not have an immediate catalyst... getting paid to wait.” (Ed Perks, 09:01)

• Managed the Franklin Convertible Securities Fund starting in 1997.

Investment Philosophy and Strategy Evolution

Philosophy shaped by multi-asset exposure

• Favors value, longer-term holding periods, and income as a key to total returns.
• The convertible experience taught him about “positive asymmetry”—investments with more upside than downside.
• Importance of adaptability: In dynamic markets, “the price you pay matters.”

Risk management and the fixed income mindset

• Fixed income backgrounds foster discipline in risk assessment.
• “You’re just doing a different kind of analysis… It gives a broader perspective on capital allocation.” (10:59)

Macro Variables and Navigating Volatility

Major macro variables and policy impacts

• Key risks: equity risk, credit risk, macro/interest rate risk (13:28)
• Daily routine involves absorbing policy and geopolitical noise, then sifting for market-moving signals.
• “Policy matters a lot… fiscal, monetary, regulatory, foreign policy, geopolitical risk… influence markets.” (Ed Perks, 13:28)

Dealing with constant news and market signals

• Ed urges tuning out the noise when possible but emphasizes being ready for opportunities during volatility.
• “There was a two to three week period of tremendous volatility [last year]… that really gave investors an opportunity.” (15:48)

Current State of Fixed Income Markets

Asset allocation and flexible “go anywhere” mandates

• Greatest current value comes from diversifying across Treasuries, agency mortgage-backed securities, investment grade, and high-yield corporates. (21:45–23:16)
• “We do think the carry, the income component of fixed income is quite attractive again today.” (21:45)

TIPS and spreads

• Not focused on TIPS (inflation-protected securities) at present; could consider if inflation surprises to the upside. (23:27)
• Credits current environment: Favors higher-quality high yield and investment grade; focus on company-specific fundamentals and relative value.

Dealing with market cycles, rates, and reinvestment risk

• Reviews the pain of 2022/2023 but notes the repositioning enabled by flexible mandates.

  “We always have assets that are benefiting in some way or have some liquidity… lets us play offense.” (25:54)

• Sees little risk of a repeat of simultaneous stock and bond crashes (“not the backdrop we’re envisioning today”). (28:25)

The Franklin Income Fund and Vehicle Innovation

Legacy and adaptation

• Only the third lead manager in the fund’s 75-year history.
• “Uninterrupted monthly dividends dating back to the launch, which was I think 1948. That’s unbelievable.” (Barry, 33:44)
• Introduced new SMAs and ETFs to broaden investor access.

Core approach:

• “The income fund was meant to look at… the most attractive income investments.” (Ed, 34:10)

Sourcing Yield and Sector Positioning

Agency mortgages, asset-backed, CLOs

• Agency MBS as a primary non-Treasury holding.
• Evaluates opportunities in asset-backed securities and secured debt; lighter participation currently.

Mortgage market conditions

• Slowdown in issuance and refinancing given higher mortgage rates.
• “Bringing longer term rates down is going to be probably the biggest beneficiary in terms of activity within the housing market.” (Ed, 36:05)

Macro: Labor market focus

• Labor has become a leading indicator for Fed policy.
• “There’s a reluctance maybe to hire… and a reluctance to fire. So we’re stuck with a little bit more stagnant component.” (37:18)

Equity Allocation and Multi-Asset Flexibility

Navigating equity markets post-pandemic

• Noted dominance of growth and mega-cap stocks over value; market cap-weighted vs. equal-weighted starkly divergent.
• “There’s a lot of other things under that initial layer… opportunity across industries…” (41:31)

Active vs. passive, security selection

• Rise of passive intensifies dispersions—opportunity for stock pickers.
• Focus remains “not trying to identify the catalyst next quarter… favorable fundamentals that… can deliver for investors.” (43:54)

Holistic capital structure investing

• Often own multiple pieces (bonds, converts, equity) in the same firm, seeking best reward within each cap stack (44:25–46:37).
• “If you like the company… why not own everything?”

Private Credit vs. Public Markets

• Private credit space booming—offers opportunity but less transparency and some mispricing risk.
• Ed sees the main caution as “a greater risk of maybe less disciplined things happening… as we move forward.” (52:01)
• Volatility-washing and Sharpe ratios: “Leading with a Sharpe ratio when you’re comparing public and private assets is not…something investors should be focusing on.” (52:01)

What Income Investors Often Misunderstand

Beyond “bond-like” dividend stocks:

• Many believe income portfolios = utilities and bonds; Ed’s approach is far more diversified, using converts and structured equity even for companies with low/no dividends.
• “That opens up the opportunity to own…convertible-like instruments in Amazon, in Microsoft, in Meta.” (53:32)

Dividend stocks

• Dividend yields have shrunk but still core for some stocks, with Southern Company cited as matching the S&P 500 total return since 2002 thanks to consistent dividends. (55:02)

Global Perspective and Geopolitical Considerations

• Non-US equities and fixed income performed well in 2025 after years of US dominance.
• “We do think it was primed for a little bit of a reallocation [to non-US]. And then you add on some of the… tariffs and the dollar dropping…” (57:51–58:03)

Policy, Volatility, and Risks Going Forward

• Biggest blind spot: complacency around low equity volatility versus genuine uncertainty.
• “Right now… policy is paramount… Midterm elections are going to be a very significant overhang… the VIX index… at very low levels… that tends to be a point where we want to be a little more cautious.” (58:40)

Notable Quotes & Memorable Moments

• On investing philosophy:
  “I like buying things at reasonable valuations that might not have an immediate catalyst, but… getting paid to wait.” (09:01)

• On multi-asset flexibility:
  “We can look across… fixed income markets and find interesting areas… may be more income focused.” (12:39)

• On private credit boom:
  “If there were something… to keep very much on the radar… it’s what is happening in that [private credit] space in terms of credit quality.” (51:23)

• On lifelong learning and humility:
  “Look, we’re not going to get every situation right, but… how you stay focused on the people that have entrusted their money to us is of paramount importance.” (60:01)

Closing Reflections and Advice

Mentors:

• Charles Johnson, legendary manager, shaped Ed’s core approach to discipline and client focus,

  “He gave me that handwritten note from the investor and asked me to respond directly.” (61:30)

Book recommendations:

• Enjoys nonfiction, especially history and geography; current read is Undaunted Courage.
• “Probably my favorite of all time is the Hemingway classic For Whom the Bell Tolls.” (62:09)

Advice to young professionals:

• Avoid overspecializing early.
• “Get in a seat somewhere… and don’t be afraid to put your hand up when opportunities arise. You have nothing but time.” (65:04)

Biggest lesson learned:

• Find your true investing DNA early. Don’t try to be someone you’re not.

Key Timestamps

• Ed’s Career Beginnings: 02:48–06:27
• Investment Philosophy Formation: 06:40–10:30
• Macro Variables/Policy: 13:14–17:34
• Current Fixed Income Market: 21:10–29:49
• Franklin Income Fund Legacy: 31:07–34:10
• Agency Mortgages & Housing Market: 34:35–36:32
• Labor Market & Macro: 37:14–37:59
• Equities & Multi-Asset Philosophy: 41:31–46:37
• Private Credit Risk: 49:46–52:59
• Client Misconceptions: 53:32–55:02
• Global Markets Outlook: 57:09–58:16
• Policy, Elections & Volatility: 58:40–59:50
• Mentors: 60:01–61:30
• Books and Personal: 62:02–64:48
• Advice to Young Investors: 65:04–65:47

Summary prepared for listeners seeking deep insight into fixed income investing, multi-asset strategies, and the investor’s mindset over a full market cycle, all in Ed Perks’ own thoughtful and disciplined tone.