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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 bears 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 diversified approach.
History of Fund/Manager
Franklin is based in San Mateo, CA, and is the manager of FKDNX. Franklin DynaTech A debuted in January of 1968. Since then, FKDNX has accumulated assets of about $13.87 billion, according to the most recently available information. The fund's current manager, Rupert H. Johnson Jr., has been in charge of the fund since January of 1968.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 11.22%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.97%, which places it in the middle 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 20.82%, compared to the category average of 15.07%. Over the past 5 years, the standard deviation of the fund is 22.73% compared to the category average of 14.72%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.22, so investors should note that it is hypothetically more volatile than the market at large. 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. FKDNX has generated a negative alpha over the past five years of -5.54, 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 mostly on equities that are traded in the United States.
The mutual fund currently has 98.36% of its holdings in stocks, which have an average market capitalization of $511.47 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Turnover is 41.52%, which means this fund makes fewer trades than the average comparable fund.
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, FKDNX is a load fund. It has an expense ratio of 0.77% compared to the category average of 0.94%. Looking at the fund from a cost perspective, FKDNX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, worse downside risk, and lower fees, Franklin DynaTech A ( FKDNX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
This could just be the start of your research on FKDNX in 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. 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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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 bears 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 diversified approach.
History of Fund/Manager
Franklin is based in San Mateo, CA, and is the manager of FKDNX. Franklin DynaTech A debuted in January of 1968. Since then, FKDNX has accumulated assets of about $13.87 billion, according to the most recently available information. The fund's current manager, Rupert H. Johnson Jr., has been in charge of the fund since January of 1968.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 11.22%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.97%, which places it in the middle 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 20.82%, compared to the category average of 15.07%. Over the past 5 years, the standard deviation of the fund is 22.73% compared to the category average of 14.72%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.22, so investors should note that it is hypothetically more volatile than the market at large. 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. FKDNX has generated a negative alpha over the past five years of -5.54, 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 mostly on equities that are traded in the United States.
The mutual fund currently has 98.36% of its holdings in stocks, which have an average market capitalization of $511.47 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 41.52%, which means this fund makes fewer trades than the average comparable fund.
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, FKDNX is a load fund. It has an expense ratio of 0.77% compared to the category average of 0.94%. Looking at the fund from a cost perspective, FKDNX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, worse downside risk, and lower fees, Franklin DynaTech A ( FKDNX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
This could just be the start of your research on FKDNX in 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. 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.