Franklin Resources (NYSE: BEN) got its start back in 1947. No doubt, it was good timing. After a long depression, the US economy was ready for a strong growth phase. And with the rising wealth, Americans would also need easy ways to invest their money, such as through mutual funds.
As for Franklin, the firm wanted to provide prudent investment options. This meant focusing on quality companies and trading for the long-haul.
It has worked quite well. Franklin is now a powerhouse, with $670 billion in assets under management. The company has also been one of the early players in foreign investing. In fact, Franklin is the largest cross-border fund manager.
So what are some of Franklin’s best funds? Let’s take a look:
Franklin Convertible Securities (FISCX)
A convertible security is a hybrid of a stock and bond. That is, it has a recurring interest payment. But, an investor can elect to convert the security into a fixed number of shares. As a result, there tends to be downside protection – yet investors can still participate in rallies.
Franklin has a top choice in the market: the Franklin Convertible Securities (MUTF: FISCX) fund, which has $1.3 billion in assets. The goal is to find fairly undervalued companies that have good prospects. It’s not easy but Franklin has a strong group of analysts who know how to crunch the numbers.
For the past ten years, the average annual return was 6.75%.
Franklin Utilities (FKUTX)
The utility industry has the reputation as being a low-risk category that’s a good fit for “orphans and widows.” But the last decade has shown that this is far from the case. Just look at Enron, which turned out to be a huge fraud. And of course, the tragedy of the nuclear power plants in Japan has imploded the country’s largest utility company.
But when it comes to investing in this sector, the Franklin Utilities (MUTF: FKUTX) has done a great job. For the most part, the fund invests in traditional, regulated utilities—with many of them in the U.S.
The result is that the fund has a good dividend payout, which is about 3.58%. The top holdings include Sempra Energy (NYSE: SRE), PG & E (NYSE: PCG), Edison International (NYSE: EIX) and Entergy (NYSE: ETR).
Franklin Growth (FKGRX)
Quick trading can be expensive and result in higher tax bills. It can also mean missing out on strong long-term returns.
Well, as for Franklin Growth (MUTF: FKGRX), it is a strong believer in the buy-and-hold investment approach. Consider that the fund has a turnover ratio of a mere 4.4%. This means that it does not cash out of its whole portfolio until about 22 years. That’s the kind of thing Warren Buffett would love.
What’s more, the long-term performance has been solid. For the past 15 years, the average annual return was 6.47%.
Templeton Foreign (TEMFX)
The Templeton Foreign (MUTF: TEMFX) fund, which has $6.4 billion in assets, takes an opportunistic approach to investments. For example, it will invest in higher risk companies in emerging markets or large companies in developed countries. It all depends on whether there are good values.
The Templeton fund certainly benefits from the global scale of its infrastructure. Consider that it has seven offices across the world.
Templeton Global Bond (TPINX)
The Templeton Global Bond (MUTF: TPINX) fund, which has $53.9 billion in assets, has a diverse fixed-income portfolio. For example, it has major investments in South Korea, Brazil, Australia, Malaysia and Poland. The fund will also take bets on various currencies.
All in all, the Templeton fund has been able to generate solid returns. In 2009, the gain was 18.86% and a year later, the return was 12.68%. Even during the financial crisis of 2008, the fund was able to post a 6.28% gain.