IIf you’re stuck looking for balanced allocation funds, consider a Franklin Corefolio A (FTCOX) allocation. FTCOX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors such as size, cost, and past performance.
FTCOX is categorized in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors can get a head start with diversified mutual funds and play around with basic holding options for a portfolio of funds. Allocation Balanced funds seek to invest in a balance of asset types, such as stocks, bonds and cash, although the inclusion of precious metals or commodities is not unusual; these funds are primarily classified according to their respective asset allocation.
Fund History / Manager
Franklin Templeton is based in San Mateo, California, and is the manager of FTCOX. Franklin Corefolio Allocation A debuted in August 2003. Since then, FTCOX has accumulated assets of approximately $ 887.68 million, according to the latest information available. A team of investment professionals is the current manager of the fund.
Obviously, what investors are looking for in these funds is a strong performance relative to their peers. FTCOX has a 5-year annualized total return of 14.26% and is in the top third of its category peers. If you’re interested in shorter timeframes, don’t overlook the fund’s 3-year total annualized return of 13.7%, which puts it in the top third over that timeframe.
When looking at the performance of a fund, it is also important to note the standard deviation of returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of FTCOX over the past three years is 18.58% compared to the category average of 15.88%. The fund’s standard deviation over the past 5 years is 14.95% compared to the category average of 13.03%. This makes the fund more volatile than its peers over the past half decade.
Investors should note that the fund has a beta of 0.98 over 5 years, so it will likely be as volatile as the market as a whole. Another factor to consider is alpha, as it reflects the performance of a portfolio on a risk-adjusted basis against a benchmark, in this case the S&P 500. FTCOX’s performance over 5 years produced a negative alpha of -2.15, which means that the managers in this portfolio have difficulty selecting stocks that generate returns above the benchmark.
Exploring the stock holdings of a mutual fund is also a valuable exercise. This can show us how the manager applies his stated methodology, as well as whether there are inherent biases in his approach. For this particular fund, much of the focus is on stocks traded in the United States.
Currently, this mutual fund owns 85.44% equity in equities and it has a negligible amount of foreign securities assets. Turnover is around 9.29%, so fund managers transact less than the average for comparable funds.
As competition intensifies in the mutual fund market, the costs become more and more important. Compared to its otherwise identical counterpart, a low cost product will outperform, all other things being equal. Thus, it is vital for investors to take a closer look at cost measures. In terms of fees, FTCOX is a dependent fund. It has an expense ratio of 0.43% compared to the category average of 0.89%. Thus, FTCOX is actually cheaper than its peers from a cost perspective.
Investors should be aware that with this product, the minimum initial investment is $ 1,000; each subsequent investment has no minimum amount.
Overall, Franklin Corefolio Allocation A (FTCOX) ranks high for Zacks mutual funds, and in conjunction with its comparatively strong performance, medium downside risk, and lower fees, Franklin Corefolio Allocation A (FTCOX ) seems to be a good potential choice for investors. now.
For more information on this product, or to compare it to other mutual funds in the Balanced Allocation, be sure to go to www.zacks.com/funds/mutual-funds for additional information. If you’re more of an equity investor, be sure to also check out our Zacks rankings and our full suite of tools that we make available to both novice and professional investors.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.