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Is Franklin DynaTech A (FKDNX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Sector - Tech fund? Franklin DynaTech A (FKDNX - Free Report) is a potential starting point. FKDNX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine 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 diversifies approach.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FKDNX. Franklin DynaTech A made its debut in January of 1968, and since then, FKDNX has accumulated about $3.40 billion in assets, per the most up-to-date date available. Rupert H. Johnson is the fund's current manager and has held that role since January of 1968.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 17.53%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 16.74%, which places it in the top 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. Over the past three years, FKDNX's standard deviation comes in at 14.01%, compared to the category average of 10.03%. Over the past 5 years, the standard deviation of the fund is 13.28% compared to the category average of 9.72%. This makes the fund more 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 FKDNX's case, the fund lost 47.2% in the most recent bear market and underperformed its peer group by 6.11%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.05, so investors should note that it is hypothetically more 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. FKDNX has generated a positive alpha over the past five years of 3.74, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
Right now, 76.92% of this mutual fund's holdings are stocks, which have an average market capitalization of $198.75 billion. Turnover is 18.14%, which means this fund makes fewer trades than its comparable peers.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FKDNX is a load fund. It has an expense ratio of 0.87% compared to the category average of 1.35%. FKDNX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Bottom Line
Overall, Franklin DynaTech A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Franklin DynaTech A looks like a good potential choice for investors right now.
Want even more information about FKDNX? 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 DynaTech A (FKDNX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Tech fund? Franklin DynaTech A (FKDNX - Free Report) is a potential starting point. FKDNX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine 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 diversifies approach.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FKDNX. Franklin DynaTech A made its debut in January of 1968, and since then, FKDNX has accumulated about $3.40 billion in assets, per the most up-to-date date available. Rupert H. Johnson is the fund's current manager and has held that role since January of 1968.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 17.53%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 16.74%, which places it in the top 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. Over the past three years, FKDNX's standard deviation comes in at 14.01%, compared to the category average of 10.03%. Over the past 5 years, the standard deviation of the fund is 13.28% compared to the category average of 9.72%. This makes the fund more 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 FKDNX's case, the fund lost 47.2% in the most recent bear market and underperformed its peer group by 6.11%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.05, so investors should note that it is hypothetically more 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. FKDNX has generated a positive alpha over the past five years of 3.74, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
Right now, 76.92% of this mutual fund's holdings are stocks, which have an average market capitalization of $198.75 billion. Turnover is 18.14%, which means this fund makes fewer trades than its comparable peers.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FKDNX is a load fund. It has an expense ratio of 0.87% compared to the category average of 1.35%. FKDNX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Bottom Line
Overall, Franklin DynaTech A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Franklin DynaTech A looks like a good potential choice for investors right now.
Want even more information about FKDNX? 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.