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Is Franklin Utilities A (FKUTX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Sector - Utilities category, but where should you start your research? Well, one fund that may not be worth investigating is Franklin Utilities A (FKUTX - Free Report) . FKUTX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FKUTX in the Sector - Utilities category, an area that is rife with possible choices. Sector - Utilities funds focus their investments on firms that provide essential daily services to millions of people like electric power, gas distribution, and water supply. All in all, the utility industry is a perfect fit for those investors looking for stability and low volatility.
History of Fund/Manager
Franklin Templeton is responsible for FKUTX, and the company is based out of San Mateo, CA. Franklin Utilities A debuted in September of 1948. Since then, FKUTX has accumulated assets of about $3.76 billion, according to the most recently available information. The fund is currently managed by John Kohli who has been in charge of the fund since December of 1998.
Performance
Investors naturally seek funds with strong performance. FKUTX has a 5-year annualized total return of 9.71% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.89%, 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. Compared to the category average of 9.13%, the standard deviation of FKUTX over the past three years is 11.28%. Looking at the past 5 years, the fund's standard deviation is 11.61% compared to the category average of 9%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. FKUTX lost 34.79% in the most recent bear market and underperformed its peer group by 8.58%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.26, so it is likely going to be less 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. The fund has produced a positive alpha over the past 5 years of 6.23, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, FKUTX is a load fund. It has an expense ratio of 0.72% compared to the category average of 1.21%. From a cost perspective, FKUTX 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.
Bottom Line
Overall, Franklin Utilities A ( FKUTX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Franklin Utilities A ( FKUTX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on FKUTXin the Sector - Utilities 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Franklin Utilities A (FKUTX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Sector - Utilities category, but where should you start your research? Well, one fund that may not be worth investigating is Franklin Utilities A (FKUTX - Free Report) . FKUTX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FKUTX in the Sector - Utilities category, an area that is rife with possible choices. Sector - Utilities funds focus their investments on firms that provide essential daily services to millions of people like electric power, gas distribution, and water supply. All in all, the utility industry is a perfect fit for those investors looking for stability and low volatility.
History of Fund/Manager
Franklin Templeton is responsible for FKUTX, and the company is based out of San Mateo, CA. Franklin Utilities A debuted in September of 1948. Since then, FKUTX has accumulated assets of about $3.76 billion, according to the most recently available information. The fund is currently managed by John Kohli who has been in charge of the fund since December of 1998.
Performance
Investors naturally seek funds with strong performance. FKUTX has a 5-year annualized total return of 9.71% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.89%, 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. Compared to the category average of 9.13%, the standard deviation of FKUTX over the past three years is 11.28%. Looking at the past 5 years, the fund's standard deviation is 11.61% compared to the category average of 9%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. FKUTX lost 34.79% in the most recent bear market and underperformed its peer group by 8.58%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.26, so it is likely going to be less 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. The fund has produced a positive alpha over the past 5 years of 6.23, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, FKUTX is a load fund. It has an expense ratio of 0.72% compared to the category average of 1.21%. From a cost perspective, FKUTX 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.
Bottom Line
Overall, Franklin Utilities A ( FKUTX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Franklin Utilities A ( FKUTX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on FKUTXin the Sector - Utilities 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.