Tag Archives: outlook

4 Best-Rated Franklin Templeton Mutual Funds

With around $763.9 billion assets under management, Franklin Templeton Investments is considered one of the well-known global investment management firms. Founded in 1947, the company offers investment management strategies and integrated risk management solutions to individuals, institutions, pension plans, trusts and partnerships. With over 650 investment professionals and offices in 35 countries, Franklin Templeton provides services in more than 180 countries. It manages a wide range of mutual funds across different categories, including both equity and fixed-income funds. Below, we share with you four top-rated Franklin Templeton mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all Franklin Templeton mutual funds, investors can click here . Franklin Corefolio Allocation Fund A (MUTF: FTCOX ) seeks growth of capital. It invests an equal portion of its assets in Franklin Flex Cap Growth Fund, Franklin Growth Fund, Mutual Shares Fund and Templeton Growth Fund. Funds in which FTCOX allocates its assets tend to invest in both domestic and foreign securities. The fund has a one-month return of 4%. T. Anthony Coffey is the fund manager of FTCOX since 2003. Templeton Global Bond Fund A (MUTF: TPINX ) invests a large chunk of its assets in bonds, including notes, bills and debentures. It primarily invests in debt securities of governments or those that are issued by government agencies. The fund invests in securities throughout the globe, and may allocate not more than 25% of its assets in securities that are considered below investment-grade. This is a non-diversified fund and has a one-month return of 2%. TPINX has an expense ratio of 0.88%, compared to the category average of 1.03%. Franklin Convertible Securities Fund A (MUTF: FISCX ) seeks maximum total return through appreciation of capital and high level of current income. The fund invests the lion’s share of its assets in convertible securities. Though FISCX may invest all of its assets in non-investment grade securities, it invests a maximum of 10% of its assets in unrated securities or those that are rated below B. It may also invest not more than 20% of its assets in securities including common and preferred stocks. The fund has a one-month return of 1.7%. As of December 2015, FISCX held 75 issues, with 2.55% of its assets invested in Tyson Foods (NYSE: TSN ). Franklin California Tax Free Income Fund A (MUTF: FKTFX ) invests a major portion of its assets in municipal securities that are rated investment-grade and exempted from federal alternative minimum tax as well as California personal income taxes. The fund may invest not more than 20% of its assets that are subject to the federal alternative minimum tax. A maximum of 35% of FKTFX’s assets may be invested in securities of the U.S. territories. It has a one-month return of 0.9%. FKTFX has an expense ratio of 0.58%, compared to the category average of 0.89%. Original Post

U.S. Factory Activity Rebounds: 3 Mutual Fund Picks

Manufacturing in the U.S. expanded for the first time in six months in March, fueled by a surge in new orders. The outlook for manufacturing looks encouraging, thanks to a tempering strength of the dollar and a recent rise in oil prices. Industrial production in the U.S. had been under intense pressure for quite some time after a stronger dollar increasing prices of export-oriented goods compared to those priced in other currencies, which eventually weighed on sales. A continuous decline in oil prices also had a negative impact on the energy sector. Energy companies had to trim spending on big-ticket factory goods including drilling equipment. But, as these headwinds are no longer strong enough, The Goldman Sachs Group, Inc. (NYSE: GS ) believes that the manufacturing recession in the U.S. may be over. Regional surveys on factory activities in Philadelphia, New York, Richmond, Kansas City and Chicago also showed marked progress in March. Record factory orders data in January too showed a release from the slump. Banking on this buoyancy, it will be prudent to invest in funds that are exposed to the industrial sector. These funds not only boast strong fundamentals but also provide stellar returns over a long investment horizon. Before we handpick some good funds, let’s take a look at the latest data: Manufacturing Outlook Improves The Institute of Supply Management said that its manufacturing index increased to 51.8% in March from 49.5% in February, indicating growth in manufacturing for the first time since Aug. 2015. Any reading above 50 is a positive indicator to customers’ orders and factory production. Twelve out of 18 industries surveyed by the index posted growth. Additionally, new orders were strongest since 2014, while a measure of production activity reached a 10-month high. The ISM’s New Orders Index rose to 58.3% in March compared with 51.5% reported for February, which showed growth in new orders for the third successive month. The ISM’s Production Index also went up to 55.3% in March from 52.8% in February, indicating growth in production last month for the third straight month. Bradley Holcomb, chairman of the ISM factory survey, said that these readings showed that manufacturing is “moving in the right direction” and there is “every reason to be confident” about the manufacturing sector in the next few months. He added that customer inventories are low and exports are improving. Export orders in March rose to 52% from 46.5% in February, the highest reading since Dec. 2014. Regional Data Looks Solid According to Morgan Stanley (NYSE: MS ), on an ISM-weighted basis, the average of the Philadelphia Fed, Empire State, Richmond Fed and Kansas City Fed manufacturing surveys rose to 51.5 in March from 47 in February. Separately, manufacturing activity in the Philadelphia area turned positive in March for the first time in seven months, while factory activity in the New York region expanded for the first time since last July. Meanwhile, manufacturing activity in the Chicago area rebounded last month, another sign that manufacturing is starting to recover from difficult times. The Chicago PMI gained 6 points to 53.6 in March banking on an uptick in production and employment. 3 Mutual Funds to Ride the Manufacturing Wave Economic activity at U.S. manufacturing companies grew in March for the first time since last summer as indicated by the ISM manufacturing index. The economy was able to shake off the adverse effects of a stronger dollar and slump in oil prices. While a stronger dollar had made export-oriented goods expensive, lower oil prices hindered growth in energy sectors. Based on encouraging readings on factory activity, it seems that manufacturing is on resurgence. Harm Bandholz, chief U.S. economist at UniCredit Bank AG, said that “the rebound in the sentiment data avoids a self-fulfilling negative spiral” and it means “manufacturing will be less of a drag on the economy.” Add to this factory orders’ advance of 1.6% in January, its strongest increase since last June and you know why the manufacturing collapse is now over. In this scenario, it will be wise to invest in mutual funds that have significant holdings in the industrial sector. Here we have selected three industrial mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy) or #2 (Buy), have given positive 3-year and 5-year annualized returns, offer minimum initial investment within $5000, carry a low expense ratio and possess no-sales load. Fidelity Select Defense & Aerospace Portfolio (MUTF: FSDAX ) invests the majority of its assets in securities of companies involved in the manufacture and sale of products or services related to the defense or aerospace industries. FSDAX has 96.97% of its holdings in the Industrials sector. FSDAX’s 3-year and 5-year annualized returns are both at 11.7%. FSDAX carries a Zacks Mutual Fund Rank #1 and the annual expense ratio of 0.79% is lower than the category average of 1.33%. Fidelity Select Industrial Equipment Portfolio (MUTF: FSCGX ) invests a major portion of its assets in securities of companies principally engaged in the manufacture or service of products for the industrial sector. FSCGX has 95.94% of its holdings in the Industrials sector. FSCGX’s 3-year and 5-year annualized returns are 9.1% and 7.7%, respectively. FSCGX carries a Zacks Mutual Fund Rank #1 and the annual expense ratio of 0.77% is lower than the category average of 1.33%. Fidelity Select Industrials (MUTF: FCYIX ) invests a large portion of its assets in securities of companies primarily involved in the development, distribution or sale of industrial products or equipment. FCYIX has 94.37% of its holdings in the Industrials sector. FCYIX’s 3-year and 5-year annualized returns are 10.1% and 9.5%, respectively. FCYIX carries a Zacks Mutual Fund Rank #2 and the annual expense ratio of 0.78% is lower than the category average of 1.33%. About Zacks Mutual Fund Rank By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past, but are also expected to outperform going forward. Pick the best mutual funds with the help of Zacks Rank. Original Post

The Riddle About Differing Fund Flows And Assets Under Management

By Detlef Glow Click to enlarge Looking at market statistics from different providers such as data vendors, associations, central banks, and others, one realizes that none of the providers state the same number for a fund’s flows or assets under management for a specific date. Even though this may sound a bit odd, it is normal and the nature of the beast. Since all data vendors, associations, and others have a different basis for the data they provide, flow numbers will be different from one provider to another. Data vendors calculate flows based on the funds in their database, while associations use the data on flows and assets under management they receive from their members. These data may include mandates and special-purpose vehicles such as pension funds, which are not mutual funds at all. In contrast, central banks use the holdings data from their associated banks to evaluate the holdings of mutual funds. Statistics calculated for the same topic and for the same market can vary widely, since the underlying data can be totally different. Good examples of the differences in databases for a market segment are the several reports available on the European exchange-traded fund (ETFs) market. While the Thomson Reuters Lipper report focuses only on ETFs, i.e., products that are funds and regulated as such, other reports focus on the whole market of exchange-traded products (ETPs), which means those reports also include structured notes such as exchange-traded commodities (ETCs). Another factor that always leads to differences in numbers is the currency in which the report is calculated, since some providers use euros, while others use the U.S. dollar for the denomination of fund flows and assets under management. But even if two providers of fund flows reports use the same data to calculate the flows for a given region, they may end up with totally different results. The employed methodology for the calculation of the flows might be different and would by definition lead to different results. In addition, all results are dependent on correct and timely data input from the fund promoters, since any inaccurate numbers in the database impact the quality of the statistics. Even though a data vendor might have quality checks in place for the incoming data, it may not find all the corrupted data. Even though quality checks do help to get the numbers right, some data may be missing and have to be estimated with an algorithm. This also explains why flows and assets under management data change over time, since it takes a while for all the fund promoters to deliver correct data. All in all, it can be said that the most recent fund flows and assets under management statistics published shortly after the end of month should be seen more as a guide to evaluate market trends than as a scientific result. Anybody who uses these kinds of statistics should make a decision about which statistics suit their needs best and then stay with those statistics. This does not mean that one should not question whether the displayed data are right, but one should realize that there always will be differences in flows data for any given month. The views expressed are the views of the author, not necessarily those of Thomson Reuters Lipper.