If investors are looking at the Mutual Fund Equity Report fund category, make sure to pass over Franklin Natural Resources A (FRNRX). FRNRX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
FRNRX is a part of the Franklin family of funds, a company based out of San Mateo, CA. Franklin Natural Resources A debuted in June of 1995. Since then, FRNRX has accumulated assets of about $318.73 million, according to the most recently available information. A team of investment professionals is the fund’s current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 5.45%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 16.98%, which places it in the middle 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. Over the past three years, FRNRX’s standard deviation comes in at 39.69%, compared to the category average of 19.87%. The fund’s standard deviation over the past 5 years is 34.36% compared to the category average of 17.6%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.38, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. FRNRX’s 5-year performance has produced a negative alpha of -4.79, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FRNRX is a load fund. It has an expense ratio of 1.10% compared to the category average of 1.46%. So, FRNRX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Franklin Natural Resources A ( FRNRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Want even more information about FRNRX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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