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Is Franklin Income Adviser (FRIAX) a Strong Mutual Fund Pick Right Now?
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On the lookout for an Allocation Balanced fund? Starting with Franklin Income Adviser (FRIAX - Free Report) should not be a possibility at this time. FRIAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as FRIAX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FRIAX. Franklin Income Adviser made its debut in August of 1948, and since then, FRIAX has accumulated about $11.89 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.15%, and it sits in the bottom 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 6.12%, which places it in the middle 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. Compared to the category average of 9.31%, the standard deviation of FRIAX over the past three years is 7.24%. Looking at the past 5 years, the fund's standard deviation is 8.27% compared to the category average of 9.35%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, FRIAX lost 39.16% and underperformed its peer group by 3%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.6, which means it is hypothetically 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. FRIAX's 5-year performance has produced a negative alpha of -2.69, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FRIAX is a no load fund. It has an expense ratio of 0.47% compared to the category average of 0.92%. Looking at the fund from a cost perspective, FRIAX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Income Adviser ( FRIAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Franklin Income Adviser (FRIAX) a Strong Mutual Fund Pick Right Now?
On the lookout for an Allocation Balanced fund? Starting with Franklin Income Adviser (FRIAX - Free Report) should not be a possibility at this time. FRIAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as FRIAX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FRIAX. Franklin Income Adviser made its debut in August of 1948, and since then, FRIAX has accumulated about $11.89 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.15%, and it sits in the bottom 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 6.12%, which places it in the middle 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. Compared to the category average of 9.31%, the standard deviation of FRIAX over the past three years is 7.24%. Looking at the past 5 years, the fund's standard deviation is 8.27% compared to the category average of 9.35%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, FRIAX lost 39.16% and underperformed its peer group by 3%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.6, which means it is hypothetically 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. FRIAX's 5-year performance has produced a negative alpha of -2.69, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FRIAX is a no load fund. It has an expense ratio of 0.47% compared to the category average of 0.92%. Looking at the fund from a cost perspective, FRIAX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Income Adviser ( FRIAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.