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Rating:Happy Birthday to a Franklin Templeton Fund Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, September 05, 2013

Happy Birthday to a Franklin Templeton Fund

Reported by Casey Quinlan

Will you still love me when I'm 65?

Franklin Templeton [profile] commemorates the 65th anniversary of its Franklin Income Fund, which was introduced in 1948. Ed Perks has managed the fund since 2002 and has been the fund's lead manager since 2004. That Perks has spent almost 10 years as lead manager of the fund is not unusual given that the fund has had only three lead managers in its long history, including Charles B. Johnson and Rupert H. Johnson Sr., the company's founder.

The fund has paid uninterrupted dividends for 65 years and the fund has $79 billion AUM. The fund's PMs can invest across a wide variety of fixed income, including Treasuries, mortgage-backed securities, corporate bonds and floating-rate term loans. In equities, PMs can invest in common stock, preferred stocks and convertible securities.

Franklin Templeton hopes to reduce volatility by diversifying the fund's assets across several asset categories, such as dividend-paying stocks, bonds and convertible securities, which could provide more consistent returns in the long haul.

Ed Perks emphasized the importance of focusing on long-term performance, but also stressed that the fund would be flexible to the current environment, which favors equities, stating, "In today's environment, the fund's asset mix has shifted toward equities as they may offer not just attractive current dividends, but also prospects for dividend growth over time. In our view, many companies have been trading at reasonable valuations considering their strong fundamentals…Going forward, we remain focused on finding equity and fixed income investment opportunities that may be able to capture current income, maintain prospects for capital appreciation and look attractively valued to us relative to long-term potential."

Franklin Income Fund's Class A shares gave an average annual total return of 10.84 percent for the three-year period ended July 31, not including sales charges, in comparison to Morningstar's Conservative Allocation peer group average return of 7.13 percent.

See the company press release below.
San Mateo, CA, September 5, 2013 – Franklin Templeton Investments is commemorating the 65th anniversary of the Franklin Income Fund [Nasdaq: FKINX]. Introduced on August 31, 1948, Franklin Income Fund has delivered income to investors through up, down and sideways markets. US Baby Boomers are turning 65 at a rate of 10,000 per day.1 While many of them are making plans to retire, Franklin Income Fund plans to continue working to deliver income to all of its investors, including Baby Boomers. The fund has paid uninterrupted dividends for 65 years,2 providing the ongoing cash flow that many have counted on and continue to count on in their retirement years. Today, the fund has more than $79 billion in assets under management.3

“We are delighted to celebrate the 65th anniversary of Franklin Income Fund, which was introduced by the company’s founder Rupert H. Johnson Sr. to address investors’ need for income, especially in retirement years,” said Dan O’Lear, executive vice president of Franklin Templeton Distributors, Inc. “As today’s massive Baby Boomer population moves into retirement, they are seeking an income solution that they can count on to replace the cash flow from their working years, with the potential for some growth as well. Franklin Income Fund has been that solution long before the phrase ‘retirement income’ became popular. For the average 65-year-old making this transition, a fund that has delivered income in all types of market environments, every year since they were born, can be an attractive option.”

A Flexible Approach

The fund’s managers adhere to a disciplined, flexible and opportunistic approach, working to maximize income while maintaining prospects for capital appreciation. In pursuing income, the fund’s managers have the flexibility to invest across the fixed income spectrum, including Treasuries, mortgage-backed securities, corporate bonds and floating-rate term loans. On the equity side, they can invest in common stocks, preferred stocks and convertible securities.

“We are not constrained by any set proportions for our asset category allocations, which allows us to actively select securities we believe present the best opportunities as market conditions change. This flexibility also allows us to bring our equity and credit investment research together to analyze a company and determine which securities offer the most value for the portfolio,” said Ed Perks, lead portfolio manager of Franklin Income Fund and director of portfolio management for the Franklin Equity Group.

“In today’s environment, the fund’s asset mix has shifted toward equities as they offer not just attractive current dividends, but also prospects for dividend growth over time. In our view, many companies have been trading at reasonable valuations considering their strong fundamentals,” Perks continued. “Going forward, we remain focused on finding equity and fixed income investment opportunities that may be able to capture current income, maintain prospects for capital appreciation and look attractively valued to us relative to long-term potential.”

Solid, long-term performance is important, but the fund’s managers understand that prudent investors are also concerned with volatility. Diversifying its assets across multiple asset categories, including dividend-paying stocks, bonds and convertible securities, may help reduce the fund’s overall portfolio volatility and improve chances of earning more consistent returns over the long term.

An Experienced Management Team

Ed Perks has managed the fund since 2002 and has been the fund’s lead manager since 2004. His predecessor as lead manager, Charles B. Johnson, joined as a manager of the fund in 1957 and continues to serve as a senior advisor on the fund’s management team. The fund has only had three lead managers in its history, the first being the company’s founder Rupert H. Johnson Sr.

The fund’s current portfolio managers, which also include Matthew Quinlan and Alex Peters, leverage the combined investment expertise of the more than 200 investment professionals in the Franklin Equity Group and the Franklin Templeton Fixed Income Group®, who perform bottom-up analysis to identify attractive investment opportunities in their respective areas of research.

A Record of Success

Franklin Income Fund’s flexible approach has delivered solid long-term returns to its shareholders. In fact, an investor who had invested $10,000 in the fund’s Class A shares, with sales charge, on August 31, 1948, and reinvested dividends and capital gains, would have seen his or her investment grow to $6,324,011 by July 31, 2013, which translates to a 10.45 percent annualized return.4

Franklin Income Fund’s Class A shares reported an attractive 12-month yield of 5.74 percent, compared to its Morningstar peer group average of 2.27 percent, as of July 31, 2013.5 As of July 31, 2013, the fund’s Class A shares received a 4-star overall Morningstar Rating™, measuring risk-adjusted returns against 584, 499 and 205 U.S.-domiciled Conservative Allocation funds over the 3-, 5- and 10-year periods, respectively.6 A fund’s overall rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Franklin Income Fund’s Class A shares delivered an average annual total return of 10.84 percent (without sales charges) for the 3-year period ended July 31, 2013, compared to 7.13 percent for Morningstar’s Conservative Allocation peer group average.7 (Note: If sales charges had been included, returns would have been lower.)

Performance data represents past performance, which does not guarantee future results. Current performance may differ from the figures shown. A fund’s investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com for most recent month-end performance.

Franklin Income Fund - Class A Periods Ended June 30, 2013

Average Annual Total Returns:

1-Year 3-year 5-Year 10-Year Since Inception (8/31/48) With Maximum 4.25% Sales Charge8 6.67% 9.77% 5.45% 7.18% 10.40% Without Sales Charge8 11.61% 11.40% 6.41% 7.66% 10.47%

30-Day Standardized Yield (as of July 31, 2013)9: 3.87%

Total Annual Operating Expenses: 0.64%

All investments involve risks, including possible loss of principal. The fund’s share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Investments in lower-rated, higher-yielding instruments include higher risk of default and loss of principal. These securities carry a greater degree of credit risk relative to investment-grade securities. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. These and other risk considerations are discussed in the fund’s prospectus.

Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN /(800)342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.

The fund’s principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned subsidiary of Franklin Resources, Inc. [NYSE:BEN], a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2 investment teams. The San Mateo, CA-based company has more than 65 years of investment experience and over $834 billion in assets under management as of July 31, 2013. For more information, please call 1-800/DIAL BEN® or visit franklintempleton.com.

Connect with Franklin Templeton on Twitter (@FTI_US), Facebook and YouTube (FranklinTempletonTV). # # #  

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