Four of Franklin Templeton’s (BEN) best backgrounds

Franklin Templeton (NYSE: BEN) is one of the best-known investment firms, offering investors a wide range of investment opportunities, including hundreds of mutual funds, to help manage their wealth. Franklin Templeton mutual funds have highly experienced management teams, disciplined investment approaches, and high ratings from fund rating agencies.

All the data below are for September 2021.

Key takeaways

  • Established more than 70 years ago, Franklin Templeton Investments is a large asset management company, using the image of Benjamin Franklin as its corporate logo.
  • Franklin Templeton, known for its actively managed mutual funds, offers a wide variety of strategies across various asset classes.
  • We take a closer look at just four of these mutual funds below.

Franklin Mutual European Fund Class A (TEMIX)

  • Assets under management (AUM): $ 830.45 million
  • 5-year average annual net asset value (NAV) return: 0.82%
  • Net expense ratio: 1.33%

Franklin Mutual European Fund Class A seeks capital appreciation, with income as a secondary objective, investing at least 80% of its net assets in securities of European companies. It focuses primarily on undervalued equities and, to a lesser extent, distressed stocks and merger arbitrage opportunities.

As the fund buys equities in foreign currencies, such as the euro and sterling, the fund’s returns are highly exposed to currency risk and can fluctuate due to changes in exchange rates. The fund has an overweight exposure to UK equities at an allocation of around 23.26%, while German equities account for around 23.54% of the fund’s portfolio. In terms of sector allocation, finance represents 17.5 percent of the fund’s assets, while consumer discretionary has an allocation of 14.59%.

Note that the fund charges loading fees of 5.5% and requires a minimum investment of $ 1,000.

Franklin Federal Tax Free Income Fund (FRFTX)

  • AUM: $ 11.47 billion
  • Average annual return on the 5-year NAV: 2.65%
  • Net expense ratio: 1.18%

The Franklin Class C Federal Tax-Free Income Fund seeks to generate current income by investing in tax-exempt municipal bonds issued by US municipalities. Because municipal bonds are exempt from federal taxes, this fund is more appropriate for investors in high tax brackets. The fund typically buys and holds municipal bonds until maturity, which results in a very low turnover rate. This makes the Franklin Federal Tax Free Income Fund highly tax efficient. The bonds issued by the municipalities of New York, Texas and Florida have the highest weights in the fund’s portfolio. More than 80% of the fund’s bonds are investment grade.

As of September 2021, the fund has an average duration of 6.43 years and a 30-day SEC yield of 0.53%. The fund is one of Franklin’s oldest and has been managed by the same fund manager since 1996. The fund has a minimum investment requirement of $ 1,000 and a 1% charge.

Franklin Utilities Class A Fund (FKUQX)

  • AUM: $ 6.14 billion
  • Average annual return on the 5-year NAV: 0.0%
  • Net expense ratio: 0.83%

Franklin Utilities Class A invests more than 98% of its assets in equities of companies that provide public services, such as electricity, gas and water. The fund charges a loading fee of 3.75% and has a minimum investment requirement of $ 1,000.

Templeton Global Bond Fund Class A (TPINX)

  • AUM: $ 11.49 billion
  • Average annual return on the 5-year NAV: 2.46%
  • Net expense ratio: 0.92%

The Templeton Global Bond Fund Class A searches the world for investment opportunities in foreign exchange, interest rates and sovereign credit that can offer attractive potential returns and additional portfolio diversification. Sovereign bonds issued by Asian countries have the highest weights in the fund’s portfolio, with a total allocation of 38.92%. Overall, bonds issued by North American countries represent 27.66% of the fund’s portfolio, while around 6.29% of the portfolio is in cash and cash equivalents. The average duration of the fund is 2.24 years and the SEC yield is 2.16%.

Michael Hasenstab has managed the Templeton Global Bond Fund since 2001. The fund comes with no loading fee and requires investors to contribute at least $ 1,000 and pay a 3.75% load.

READ ALSO:  When are mutual funds considered a bad investment?
About the author

Mark Holland

Leave a comment: