Any investors hoping to find a Allocation Balanced fund could think about starting with Franklin Growth Allocation A (FGTIX). FGTIX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
FGTIX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation.
History of fund/manager
FGTIX is a part of the Franklin family of funds, a company based out of San Mateo, CA. Since Franklin Growth Allocation A made its debut in December of 1996, FGTIX has garnered more than $1.28 billion in assets. A team of investment professionals is the fund’s current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FGTIX has a 5-year annualized total return of 11.39%, and it sits 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 17.28%, which places it in the top third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
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. The standard deviation of FGTIX over the past three years is 10.54% compared to the category average of 11.81%. Looking at the past 5 years, the fund’s standard deviation is 12.73% compared to the category average of 13.18%. This makes the fund less volatile than its peers over the past half-decade.
Risk factors
Investors should note that the fund has a 5-year beta of 0.79, so it is likely going to be less volatile than 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. The fund has produced a negative alpha over the past 5 years of -2.77, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FGTIX is a load fund. It has an expense ratio of 0.62% compared to the category average of 0.93%. From a cost perspective, FGTIX is actually cheaper than its peers.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom line
Overall, Franklin Growth Allocation A ( FGTIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Franklin Growth Allocation A ( FGTIX ) looks like a great potential choice for investors right now.
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