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Is Franklin Growth A (FKGRX) a Strong Mutual Fund Pick Right Now?

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If investors are looking at the Mutual Fund Equity Report fund category, Franklin Growth A (FKGRX - Free Report) could be a potential option. FKGRX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Franklin Templeton is based in San Mateo, CA, and is the manager of FKGRX. Since Franklin Growth A made its debut in March of 1948, FKGRX has garnered more than $10.56 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 12.5%, and is 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 13.62%, 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. FKGRX's standard deviation over the past three years is 19.62% compared to the category average of 16.36%. Looking at the past 5 years, the fund's standard deviation is 17.68% compared to the category average of 14.39%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FKGRX has generated a negative alpha over the past five years of -1.13, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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 principally on equities that are traded in the United States.

Right now, 75.73% of this mutual fund's holdings are stocks, with an average market capitalization of $344.37 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Industrial Cyclical
This fund's turnover is about 6.54%, so the fund managers are making fewer trades than comparable funds.

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, FKGRX is a load fund. It has an expense ratio of 0.78% compared to the category average of 0.99%. FKGRX is actually cheaper than its peers when you consider factors like cost.

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 A ( FKGRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.

Want even more information about FKGRX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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