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Is Franklin Natural Resources A (FRNRX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Sector - Energy fund? Well, Franklin Natural Resources A (FRNRX - Free Report) would not be a good potential starting point right now. FRNRX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FRNRX in the Sector - Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector - Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FRNRX. Since Franklin Natural Resources A made its debut in June of 1995, FRNRX has garnered more than $283.65 million in assets. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. FRNRX has a 5-year annualized total return of -7.45% and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.08%, 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. The standard deviation of FRNRX over the past three years is 21.11% compared to the category average of 12.48%. Looking at the past 5 years, the fund's standard deviation is 22.13% compared to the category average of 12.56%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. FRNRX lost 54.92% in the most recent bear market and outperformed its peer group by 0.23%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.09, the fund is likely to be more volatile than the market average. 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. FRNRX has generated a negative alpha over the past five years of -16.05, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, FRNRX is a load fund. It has an expense ratio of 1.13% compared to the category average of 1.48%. Looking at the fund from a cost perspective, FRNRX is actually cheaper than its peers.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Natural Resources A ( FRNRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Franklin Natural Resources A ( FRNRX ) looks like a somewhat weak choice for investors right now.
Your research on the Sector - Energy segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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 Natural Resources A (FRNRX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Energy fund? Well, Franklin Natural Resources A (FRNRX - Free Report) would not be a good potential starting point right now. FRNRX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify FRNRX in the Sector - Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector - Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FRNRX. Since Franklin Natural Resources A made its debut in June of 1995, FRNRX has garnered more than $283.65 million in assets. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. FRNRX has a 5-year annualized total return of -7.45% and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.08%, 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. The standard deviation of FRNRX over the past three years is 21.11% compared to the category average of 12.48%. Looking at the past 5 years, the fund's standard deviation is 22.13% compared to the category average of 12.56%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. FRNRX lost 54.92% in the most recent bear market and outperformed its peer group by 0.23%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.09, the fund is likely to be more volatile than the market average. 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. FRNRX has generated a negative alpha over the past five years of -16.05, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, FRNRX is a load fund. It has an expense ratio of 1.13% compared to the category average of 1.48%. Looking at the fund from a cost perspective, FRNRX is actually cheaper than its peers.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Natural Resources A ( FRNRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Franklin Natural Resources A ( FRNRX ) looks like a somewhat weak choice for investors right now.
Your research on the Sector - Energy segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.