There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that might be worth investigating is Franklin Growth Allocation A (FGTIX). FGTIX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
FGTIX is one of many Zacks’ Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FGTIX. Since Franklin Growth Allocation A made its debut in December of 1996, FGTIX has garnered more than $1.18 billion in assets. The fund’s current manager is a team of investment professionals.
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 12.38%, and it sits in the top 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 12.65%, 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 15.18%, the standard deviation of FGTIX over the past three years is 14.45%. The standard deviation of the fund over the past 5 years is 11.66% compared to the category average of 12.52%. This makes the fund less volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.75, so investors should note that it is hypothetically 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. FGTIX has generated a negative alpha over the past five years of -1.12, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, FGTIX is a load fund. It has an expense ratio of 0.67% compared to the category average of 0.89%. So, FGTIX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Overall, Franklin Growth Allocation A ( FGTIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Franklin Growth Allocation A ( FGTIX ) looks like a good potential choice for investors right now.
For additional information on the Allocation Balanced area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FGTIX too 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.