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 Franklin Mutual funds bears the name and image of one of America's greatest citizens - Benjamin Franklin. In this review, we'll see if this company lives up to the legacy he's left behind. As we've done in the past, we're going to take some liberties with the name of this mutual fund, but we do realize the company's formal name is Franklin Templeton Investments.
Franklin Family of Mutual Funds
Franklin Templeton Investments is part of Franklin Resources, Inc., which also owns Mutual Series, Bisset, Fiduciary Trust and Darby Overseas. The company has offices in 29 countries and offers investment opportunities in 100 countries. Franklin offers solutions to institutions such as the management of 401k plans and pension plans, as well as services to individuals such as Roth IRA plans, traditional IRAs and 529 plans.
Within all of the operating names, Franklin Templeton Investments offers investors more than 200 products and services. Each portion of the company specializes in a particular investment segment or geography. For example, Bisset's focus is on Canada. In total, Franklin manages over $675 billion in assets on behalf of their client investors.
Franklin Funds Fee Structure and Returns
Morningstar ratings indicates that the expense ratio for mutual funds at Franklin are all average including for domestic (1.33%) and international stock funds (1.62%) as well as taxable bond funds (0.93%). Franklin mutual funds offer investors a nice mix of asset classes, with domestic stocks (18%), bond funds (20%) and international stocks (28%), in relatively good balance.
At $1,000, the minimum investment required by Franklin is higher than some of the other fund families reviewed. Most recently we talked about Hartford Mutual Funds - which does not have a minimum. Another drawback at Franklin is the mix of funds charging a load (82.4%) versus no-load mutual funds (17.6%). As of August 2008, the average return on the family of funds offered by Franklin was 8.57% over the last five years.
Top Rated Franklin Mutual Funds
The top rated mutual funds at Franklin are all stock funds - two domestic bond funds and one asset allocation fund. All three of these top funds at Franklin include a front load ranging from 4.25% to 5.75% and a minimum investment of $1,000. That being said, here is our list of the top rated mutual funds at Franklin:
- Franklin OR Tax-Free Income A (FRORX) - with over $918 million in assets, this municipal bond fund specializes in bonds from Oregon. Top holdings include Salem Ore Hosp Fac Auth (5%), Oregon Health Sciences Univ Re Rev Bd (5%), and Port Portland Ore Arpt Rev Passenge (5.5%). The fund's expense ratio is 0.64% and there is a front-load of 4.25%. The minimum investment is $1,000 and the average return over the last five years is 4.09%. (August 2008)
- Franklin CA Tax-Free Income A ( FKTFX) - another municipal bond fund, this time specializing in California offerings. With $14.6 billion in assets, top holdings include Foothill / Eastern Transn Corr Tol (5.75%), San Joaquin Hills Calif Transn Rev (5.5%), and Los Angeles Calif Uni Sch Dist (5%). The expense ratio for the fund is 0.57% and the fund has a front-load of 4.25%. The average return over the last five years is 4.10%. (August 2008)
- Franklin CT Tax-Free Income A (FXCTX) - with $430 million in assets, this is a municipal bond fund from Connecticut. Top holdings include Puerto Rico Elec Pwr Auth 5% and Connecticut St Health & Edl Fa Rev Bd 5%. The expense ratio for the fund is 0.69% and it carries a front-load of 4.25%. With a minimum investment of $1,000, the average return over the last five years is 3.86%. (August 2008)
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