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4 Must-Have Franklin Templeton Mutual Funds For 2021

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Zacks Equity Research
·5 min read
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With around $1.5 trillion assets under management as of Dec 31, 2020, Franklin Templeton Investments is a well-known global investment management firm. Franklin Templeton acquired Legg Mason on Jul 31. It offers investment management strategies and integrated risk-management solutions to individuals, institutions, pension plans, trusts and partnerships.

Founded in 1947, Franklin Templeton Investments offers "exceptional asset management" to clients in more than 165 countries. It has presence in more than 30 countries and around 1,300 investment professionals. Franklin Templeton Investments is the biggest cross-border fund management group in the world.

Franklin Templeton’s Performance in 2020

Franklin Templeton invests in a variety of sectors that are sensitive, cyclical and defensive. From the sensitive sectors, most investments were made in the technology sector. Among the cyclical sectors, the fund family invested the maximum in the financial services sector, while among the defensive sectors it invested heavily in healthcare.

Technology Select Sector SPDR (XLK) has climbed 37.2% over the past one year and turned up as the best-performing sector among the 11 S&P 500 sectors.

Meanwhile, on 02 February 2021, two of Franklin Templeton’s mutual funds were awarded the 2020 Raging Bull Certificate. While, Franklin U.S. Opportunities Fund was awarded the best (FSCA-Approved) Offshore United States Equity General Fund over the past three years, the Templeton China Fund was adjudged the best (FSCA-Approved) Offshore Far East Equity General Fund over the same period.

4 Best Funds to Buy Now

We have highlighted four Franklin Templeton mutual funds carrying a Zacks Mutual Fund Rank #1 (Strong Buy) that are poised to gain from such factors. Moreover, these funds have encouraging one and three-year returns. Additionally, the minimum initial investment is within $5000.

We expect these funds to outperform their peers in the future. Remember, the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers. Unlike most of the fund-rating systems, the Zacks Mutual Fund Rank is not just focused on past performance, but also on the likely future success of the fund.

The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Franklin Small-Mid Cap Growth Fund Class A FRSGX aims for long-term capital growth. The fund invests the majority of its assets in equity securities of small-capitalization and mid-capitalization companies. Its managers choose companies from a range of sectors that include information technology, consumer discretionary, industrials and healthcare.

This Zacks Small Cap Growth product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FRSGX has an annual expense ratio of 0.88%. The fund has one and three-year returns of 56% and 25.2%, respectively.

Franklin DynaTech Fund Class A FKDNX aims for capital appreciation. The fund primarily invests in common stocks of companies, which the fund manager believes are leaders in innovation, take advantage of new technologies, have superior management and benefit from new industry conditions in a dynamically changing global economy. 

This Sector - Tech product has a history of positive total returns for over 10 years. Specifically, the fund's returns over the one and three-year benchmarks are 57.7% and 30.3%, respectively. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

The fund has an annual expense ratio of 0.85%.

Franklin High Income Fund Advisor Class FVHIX aims for high current income. The fund also aims for capital appreciation to the extent it is possible and consistent with the fund's principal goal by investing predominantly in high yield, lower-rated debt securities.

This Zacks High Yield-Bonds product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FVHIX has an annual expense ratio of 0.63%. The fund has one and three-year returns of 6.9% and 5.7%, respectively.

Franklin Emerging Market Debt Opportunities Fund FEMDX aims for high total return. The fund invests majority of its assets in debt securities of emerging market countries. Emerging market countries generally include those considered to be developing by the World Bank.

This Zacks Intl Bond-Emerging product has a history of positive total returns for more than 10 years. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.

FEMDX has an annual expense ratio of 1.02%. The fund has one and three-year returns of 3.9% and 4.1%, respectively.

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