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Is Franklin Growth Allocation A (FGTIX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding an Allocation Balanced fund? Well, Franklin Growth Allocation A (FGTIX - Free Report) would not be a good potential starting point right now. FGTIX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FGTIX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in 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. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
FGTIX is a part of the Franklin Templeton family of funds, a company based out of San Mateo, CA. Franklin Growth Allocation A debuted in December of 1996. Since then, FGTIX has accumulated assets of about $869.47 million, according to the most recently available information. The fund's current manager, T. Anthony Coffey, has been in charge of the fund since December of 2000.
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 3.96% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.57%, which places it in the top 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. FGTIX's standard deviation over the past three years is 8.92% compared to the category average of -36.4%. Over the past 5 years, the standard deviation of the fund is 8.73% compared to the category average of -0.06%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. FGTIX lost 42.55% in the most recent bear market and outperformed its peer group by 49%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.76, the fund is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -2.49. This means 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 0.64% compared to the category average of -42.55%. From a cost perspective, FGTIX is actually more expensive than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Growth Allocation A ( FGTIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Allocation Balanced, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Franklin Growth Allocation A (FGTIX) a Strong Mutual Fund Pick Right Now?
Having trouble finding an Allocation Balanced fund? Well, Franklin Growth Allocation A (FGTIX - Free Report) would not be a good potential starting point right now. FGTIX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FGTIX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in 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. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
FGTIX is a part of the Franklin Templeton family of funds, a company based out of San Mateo, CA. Franklin Growth Allocation A debuted in December of 1996. Since then, FGTIX has accumulated assets of about $869.47 million, according to the most recently available information. The fund's current manager, T. Anthony Coffey, has been in charge of the fund since December of 2000.
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 3.96% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.57%, which places it in the top 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. FGTIX's standard deviation over the past three years is 8.92% compared to the category average of -36.4%. Over the past 5 years, the standard deviation of the fund is 8.73% compared to the category average of -0.06%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. FGTIX lost 42.55% in the most recent bear market and outperformed its peer group by 49%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 0.76, the fund is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -2.49. This means 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 0.64% compared to the category average of -42.55%. From a cost perspective, FGTIX is actually more expensive than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Growth Allocation A ( FGTIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Allocation Balanced, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.