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Table of Contents

4 Excellent Franklin Templeton Funds

Franklin Templeton (NYSE: BEN) is one of the best-known investment firms, offering investors a wide range of investment opportunities, including hundreds of mutual funds, to help manage their wealth. Franklin Templeton mutual funds boast highly experienced management teams, disciplined investment approaches, and high marks from funds rating agencies.

Key Takeaways

  • Established more than 70 years ago, Franklin Templeton Investments is a large asset management company, which uses Benjamin Franklin's likeness as its corporate logo.
  • Known for its actively-managed mutual funds, Franklin Templeton offers a wide variety of strategies across several asset classes.
  • We take a closer look at just four of these mutual funds below.

1. Franklin Mutual European Fund Class A (TEMIX)

  • Assets under management (AUM): $842.47 million as of Jan. 31, 2022
  • 5-year average annual net asset value (NAV) return: 6.09% as of Jan. 31, 2022
  • Net expense ratio: 1.33% as of May 01, 2021

The Franklin Mutual European Fund Class A seeks capital appreciation, with income as a secondary goal, by investing at least 80% of its net assets in the securities of European companies. It focuses primarily on undervalued equity securities and, to a lesser extent, distressed securities and merger arbitrage opportunities.

Because the fund purchases equity securities in foreign currencies, such as the euro and British pound sterling, the fund's returns are highly exposed to currency risk and may fluctuate due to changes in exchange rates.

As of Jan. 31, 2022, the fund has exposure to German and U.K. stocks with slightly more than a 22% allocation each, while 19.09% is allocated to France and 11.41% to the Netherlands.

Regarding sector allocation, below are the top five sectors with the highest portfolio weighting within the TEMIX:

  • Capital goods: 13.92%
  • Banks: 10.48%
  • Insurance: 10.01%
  • Food, beverage, and tobacco: 9.37% 
  • Consumer Durables and Apparel: 7.45%

Note that the TEMIX fund charges load fees of 5.5% for investment balances of less than $50,000 and it requires a minimum investment of $1,000.

2. Franklin Federal Tax-Free Income Fund (FRFTX)

  • AUM: $11.96 billion as of Jan. 31, 2022
  • 5-year average annual NAV return: 2.55% as of Jan. 31, 2022
  • Net expense ratio: 1.18% as of Sept. 01, 2021

The Franklin Federal Tax-Free Income Fund Class C seeks to generate current income by investing in tax-exempt municipal bonds issued by U.S. municipalities. Because municipal bonds are exempt from federal taxes, this fund is most appropriate for investors in high tax brackets. The fund typically buys and holds municipal bonds until maturity, which results in a very low turnover ratio.

This makes the Franklin Federal Tax-Free Income Fund highly tax-efficient. Bonds issued by municipalities in New York, Texas, and Florida have the highest weights in the fund's portfolio. Over 80% of the fund's bonds are investment-grade.

The fund has an average duration of 6.49 years and a 30-day SEC yield of 0.89% as of Jan. 31, 2022. The FRFTX is one of the oldest Franklin funds and has been managed by the same fund manager since 1996. The fund has a minimum investment requirement of $1,000 and a 1% load.

3. Franklin Utilities Fund Class A (FKUQX)

  • AUM: $6.55 billion as of Jan. 31, 2022
  • 5-year average annual NAV return: 9.90% excluding sales charges as of Jan. 31, 2022
  • Net expense ratio: 0.82% as of Feb. 01, 2022

The Franklin Utilities Class A invests more than 98% of its assets in equity securities of firms that provide utility services, such as electricity, gas, and water. As of Feb. 01, 2022, the fund charges a load fee of 3.75% and has a minimum investment requirement of $1,000.

4. Templeton Global Bond Fund Class A (TPINX)

  • AUM: $8.06 billion as of Jan. 31, 2022
  • 5-year average annual NAV return: -1.07% excluding sales charges as of Jan. 31, 2022
  • Net expense ratio: 0.92% as of May 01, 2022

The Templeton Global Bond Fund Class A searches the world for investment opportunities in currencies, interest rates, and sovereign credit that can offer attractive potential returns and additional portfolio diversification.

As of Jan. 31, 2022, sovereign bonds issued by countries in Asia have the largest weights in the fund's portfolio, with 42.81% total allocation. Overall, bonds issued by Latin American and Caribbean countries account for 20.33%, and the North American countries account for 12.91% of the fund's portfolio. The fund holds 8.82% of the portfolio in cash and cash equivalents. The fund's average duration is 2.21 years, and SEC yield is 3.55%.

Michael Hasenstab has managed the Templeton Global Bond Fund since 2001, while Calvin Ho has co-managed the fund since 2008. The fund requires investors to contribute at least $1,000 and pay a 3.75% load.

Article Sources

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  1. Franklin Templeton. "About Us."

  2. Franklin Templeton. "Franklin Mutual European Fund TEMIX."

  3. Franklin Templeton. "Franklin Federal Tax-Free Income Fund, Municipals."

  4. Franklin Templeton. "Franklin Federal Tax-Free Income Fund."

  5. Franklin Templeton. "Franklin Utilities Fund."

  6. Franklin Templeton. "Franklin Utilities Fund, Sector."

  7. Franklin Templeton. "TPINX Templeton Global Bond Fund."

  8. Franklin Templeton. "Templeton Global Bond Fund."

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