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Is Franklin DynaTech A (FKDNX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Sector - Tech funds, a place to start could be Franklin DynaTech A (FKDNX - Free Report) . FKDNX has 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 responsible for FKDNX, and the company is based out of San Mateo, CA. Since Franklin DynaTech A made its debut in January of 1968, FKDNX has garnered more than $14.77 billion in assets. The fund is currently managed by Rupert H. Johnson Jr. who has been in charge of the fund since January of 1968.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.5%, 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 19.05%, which places it in the top 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. The standard deviation of FKDNX over the past three years is 20.23% compared to the category average of 12.1%. Over the past 5 years, the standard deviation of the fund is 23.03% compared to the category average of 14.2%. 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 1.32, 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. FKDNX has generated a negative alpha over the past five years of -7.02, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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.
As of the last filing date, the mutual fund has 80.27% of its assets in stocks, with an average market capitalization of $643.20 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Turnover is about 29.34%, so those in charge of the fund make fewer trades than its comparable peers.
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 need to be aware that with this product, the minimum initial investment is $1,000; 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.
For additional information on this product, or to compare it to other mutual funds in the Sector - Tech, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
View the Zacks #1 Rank List
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Is Franklin DynaTech A (FKDNX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Sector - Tech funds, a place to start could be Franklin DynaTech A (FKDNX - Free Report) . FKDNX has 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 responsible for FKDNX, and the company is based out of San Mateo, CA. Since Franklin DynaTech A made its debut in January of 1968, FKDNX has garnered more than $14.77 billion in assets. The fund is currently managed by Rupert H. Johnson Jr. who has been in charge of the fund since January of 1968.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.5%, 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 19.05%, which places it in the top 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. The standard deviation of FKDNX over the past three years is 20.23% compared to the category average of 12.1%. Over the past 5 years, the standard deviation of the fund is 23.03% compared to the category average of 14.2%. 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 1.32, 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. FKDNX has generated a negative alpha over the past five years of -7.02, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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.
As of the last filing date, the mutual fund has 80.27% of its assets in stocks, with an average market capitalization of $643.20 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is about 29.34%, so those in charge of the fund make fewer trades than its comparable peers.
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 need to be aware that with this product, the minimum initial investment is $1,000; 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.
For additional information on this product, or to compare it to other mutual funds in the Sector - Tech, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.