Yahoo Finance Is Franklin Growth A (FKGRX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Large Cap Growth fund? Starting with Franklin Growth A (FKGRX) is one possibility. FKGRX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FKGRX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
FKGRX finds itself in the Franklin Templeton family, based out of San Mateo, CA. Since Franklin Growth A made its debut in March of 1948, FKGRX has garnered more than $9.04 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. FKGRX has a 5-year annualized total return of 10.82% and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 13.73%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 9.63%, the standard deviation of FKGRX over the past three years is 12.65%. Looking at the past 5 years, the fund's standard deviation is 12.05% compared to the category average of 9.96%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. FKGRX lost 47.26% in the most recent bear market and outperformed its peer group by 1.59%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1, which means it is hypothetically as volatile as the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a positive alpha of 1.12, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.
Right now, 89.87% of this mutual fund's holdings are stocks, which have an average market capitalization of $169.07 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Health
Turnover is about 5%, so those in charge of the fund make fewer trades than its comparable peers.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FKGRX is a load fund. It has an expense ratio of 0.82% compared to the category average of 1.06%. FKGRX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Growth A ( FKGRX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FKGRX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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