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Is Franklin Real Estate Security A (FREEX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Sector - Real Estate fund category, make sure to pass over Franklin Real Estate Security A (FREEX - Free Report) . FREEX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FREEX in Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks to their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players-almost bond-like in some cases-though their risk is similar to equities.
History of Fund/Manager
Franklin is based in San Mateo, CA, and is the manager of FREEX. Franklin Real Estate Security A debuted in January of 1994. Since then, FREEX has accumulated assets of about $174.77 million, according to the most recently available information. Daniel Scher is the fund's current manager and has held that role since May of 2014.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 4.01%, and is 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 5.2%, 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. Compared to the category average of 12.53%, the standard deviation of FREEX over the past three years is 16.43%. The standard deviation of the fund over the past 5 years is 18.6% compared to the category average of 14.04%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1, the fund is likely to be as volatile as the market average. 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. With a negative alpha of -8.74, 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, FREEX is a load fund and it has an expense ratio of 1.03%.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
As a mutual fund with a 'sell' rank, FREEX is in the bottom 40% of all funds we cover and it may be one to avoid putting on your short list of possible picks in Sector - Real Estate. This fund from Franklin needs to turn around some of its key fundamental metrics such as the Zacks Ranks of its holdings, alpha, and performance in order for investors to consider Franklin Real Estate Security A in the future.
Want even more information about FREEX? 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. 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 Real Estate Security A (FREEX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Sector - Real Estate fund category, make sure to pass over Franklin Real Estate Security A (FREEX - Free Report) . FREEX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FREEX in Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks to their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players-almost bond-like in some cases-though their risk is similar to equities.
History of Fund/Manager
Franklin is based in San Mateo, CA, and is the manager of FREEX. Franklin Real Estate Security A debuted in January of 1994. Since then, FREEX has accumulated assets of about $174.77 million, according to the most recently available information. Daniel Scher is the fund's current manager and has held that role since May of 2014.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 4.01%, and is 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 5.2%, 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. Compared to the category average of 12.53%, the standard deviation of FREEX over the past three years is 16.43%. The standard deviation of the fund over the past 5 years is 18.6% compared to the category average of 14.04%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1, the fund is likely to be as volatile as the market average. 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. With a negative alpha of -8.74, 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, FREEX is a load fund and it has an expense ratio of 1.03%.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
As a mutual fund with a 'sell' rank, FREEX is in the bottom 40% of all funds we cover and it may be one to avoid putting on your short list of possible picks in Sector - Real Estate. This fund from Franklin needs to turn around some of its key fundamental metrics such as the Zacks Ranks of its holdings, alpha, and performance in order for investors to consider Franklin Real Estate Security A in the future.
Want even more information about FREEX? 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. 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.