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Is Franklin DynaTech A (FKDNX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Sector - Tech fund? Starting with Franklin DynaTech A (FKDNX - Free Report) is one possibility. FKDNX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that FKDNX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
FKDNX finds itself in the Franklin family, based out of San Mateo, CA. Franklin DynaTech A made its debut in January of 1968, and since then, FKDNX has accumulated about $10.59 billion in assets, per the most up-to-date date available. Rupert H. Johnson Jr. Is the fund's current manager and has held that role since January of 1968.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 14.3%, 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 0.2%, which places it in the bottom 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. Over the past three years, FKDNX's standard deviation comes in at 25%, compared to the category average of 15.6%. Over the past 5 years, the standard deviation of the fund is 23.42% compared to the category average of 16.53%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FKDNX has a 5-year beta of 1.1, which means it is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.23, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 primarily on equities that are traded in the United States.
Currently, this mutual fund is holding 88.35% in stocks, which have an average market capitalization of $397.73 billion. With turnover at about 15.29%, this fund makes fewer trades than comparable funds.
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, FKDNX is a load fund. It has an expense ratio of 0.83% compared to the category average of 0.96%. FKDNX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Franklin DynaTech A ( FKDNX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
This could just be the start of your research on FKDNXin the Sector - Tech category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Franklin DynaTech A (FKDNX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Sector - Tech fund? Starting with Franklin DynaTech A (FKDNX - Free Report) is one possibility. FKDNX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that FKDNX is a Sector - Tech option, and this area is loaded with many options. Found in a wide number of industries such as semiconductors, software, internet, and networking, tech companies are everywhere. Thus, Sector - Tech mutual funds that invest in technology let investors own a stake in a notoriously volatile sector, but with a much more diversifies approach.
History of Fund/Manager
FKDNX finds itself in the Franklin family, based out of San Mateo, CA. Franklin DynaTech A made its debut in January of 1968, and since then, FKDNX has accumulated about $10.59 billion in assets, per the most up-to-date date available. Rupert H. Johnson Jr. Is the fund's current manager and has held that role since January of 1968.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 14.3%, 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 0.2%, which places it in the bottom 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. Over the past three years, FKDNX's standard deviation comes in at 25%, compared to the category average of 15.6%. Over the past 5 years, the standard deviation of the fund is 23.42% compared to the category average of 16.53%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FKDNX has a 5-year beta of 1.1, which means it is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.23, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 primarily on equities that are traded in the United States.
Currently, this mutual fund is holding 88.35% in stocks, which have an average market capitalization of $397.73 billion. With turnover at about 15.29%, this fund makes fewer trades than comparable funds.
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, FKDNX is a load fund. It has an expense ratio of 0.83% compared to the category average of 0.96%. FKDNX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Franklin DynaTech A ( FKDNX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
This could just be the start of your research on FKDNXin the Sector - Tech category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.