SAN MATEO, CA--(Marketwired - Sep 5, 2013) - Franklin Templeton Investments is commemorating the 65th anniversary of the Franklin Income Fund (
"We are delighted to celebrate the 65th anniversary of Franklin Income Fund, which was introduced by the company's founder Rupert H. Johnson Sr. to address investors' need for income, especially in retirement years," said Dan O'Lear, executive vice president of Franklin Templeton Distributors, Inc. "As today's massive Baby Boomer population moves into retirement, they are seeking an income solution that they can count on to replace the cash flow from their working years, with the potential for some growth as well. Franklin Income Fund has been that solution long before the phrase 'retirement income' became popular. For the average 65-year-old making this transition, a fund that has delivered income in all types of market environments, every year since they were born, can be an attractive option."
A Flexible Approach
The fund's managers adhere to a disciplined, flexible and opportunistic approach, working to maximize income while maintaining prospects for capital appreciation. In pursuing income, the fund's managers have the flexibility to invest across the fixed income spectrum, including Treasuries, mortgage-backed securities, corporate bonds and floating-rate term loans. On the equity side, they can invest in common stocks, preferred stocks and convertible securities.
"We are not constrained by any set proportions for our asset category allocations, which allows us to actively select securities we believe present the best opportunities as market conditions change. This flexibility also allows us to bring our equity and credit investment research together to analyze a company and determine which securities offer the most value for the portfolio," said Ed Perks, lead portfolio manager of Franklin Income Fund and director of portfolio management for the Franklin Equity Group.
"In today's environment, the fund's asset mix has shifted toward equities as they offer not just attractive current dividends, but also prospects for dividend growth over time. In our view, many companies have been trading at reasonable valuations considering their strong fundamentals," Perks continued. "Going forward, we remain focused on finding equity and fixed income investment opportunities that may be able to capture current income, maintain prospects for capital appreciation and look attractively valued to us relative to long-term potential."
Solid, long-term performance is important, but the fund's managers understand that prudent investors are also concerned with volatility. Diversifying its assets across multiple asset categories, including dividend-paying stocks, bonds and convertible securities, may help reduce the fund's overall portfolio volatility and improve chances of earning more consistent returns over the long term.
An Experienced Management Team
Ed Perks has managed the fund since 2002 and has been the fund's lead manager since 2004. His predecessor as lead manager, Charles B. Johnson, joined as a manager of the fund in 1957 and continues to serve as a senior advisor on the fund's management team. The fund has only had three lead managers in its history, the first being the company's founder Rupert H. Johnson Sr.
The fund's current portfolio managers, which also include Matthew Quinlan and Alex Peters, leverage the combined investment expertise of the more than 200 investment professionals in the Franklin Equity Group and the Franklin Templeton Fixed Income Group®, who perform bottom-up analysis to identify attractive investment opportunities in their respective areas of research.
A Record of Success
Franklin Income Fund's flexible approach has delivered solid long-term returns to its shareholders. In fact, an investor who had invested $10,000 in the fund's Class A shares, with sales charge, on August 31, 1948, and reinvested dividends and capital gains, would have seen his or her investment grow to $6,324,011 by July 31, 2013, which translates to a 10.45 percent annualized return.4
Franklin Income Fund's Class A shares reported an attractive 12-month yield of 5.74 percent, compared to its Morningstar peer group average of 2.27 percent, as of July 31, 2013.5 As of July 31, 2013, the fund's Class A shares received a 4-star overall Morningstar Rating™, measuring risk-adjusted returns against 584, 499 and 205 U.S.-domiciled Conservative Allocation funds over the 3-, 5- and 10-year periods, respectively.6 A fund's overall rating is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.
Franklin Income Fund's Class A shares delivered an average annual total return of 10.84 percent (without sales charges) for the 3-year period ended July 31, 2013, compared to 7.13 percent for Morningstar's Conservative Allocation peer group average.7 (Note: If sales charges had been included, returns would have been lower.)
Performance data represents past performance, which does not guarantee future results. Current performance may differ from the figures shown. A fund's investment return and principal value will change with market conditions, and you may have a gain or a loss when you sell your shares. Please call Franklin Templeton Investments at (800) DIAL BEN/342-5236 or visit franklintempleton.com for most recent month-end performance.
Franklin Income Fund - Class A
Periods Ended June 30, 2013
Average Annual Total Returns:
|With Maximum 4.25% Sales Charge8||6.67%||9.77%||5.45%||7.18%||10.40%|
|Without Sales Charge8||11.61%||11.40%||6.41%||7.66%||10.47%|
30-Day Standardized Yield (as of July 31, 2013)9: 3.87%
Total Annual Operating Expenses: 0.64%
All investments involve risks, including possible loss of principal. The fund's share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund's share price may decline. Changes in the financial strength of a bond issuer or in a bond's credit rating may affect its value. Investments in lower-rated, higher-yielding instruments include higher risk of default and loss of principal. These securities carry a greater degree of credit risk relative to investment-grade securities. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. These and other risk considerations are discussed in the fund's prospectus.
Investors should carefully consider a fund's investment goals, risks, charges and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN /(800)342-5236 or visit franklintempleton.com. Please carefully read a prospectus before you invest or send money.
The fund's principal underwriter is Franklin Templeton Distributors, Inc., a wholly owned subsidiary of Franklin Resources, Inc. (
1. Source: U.S. Census Bureau, International Data Base, June 2012.
2. Dividends and capital gains will vary, depending on the fund's income, and past distributions are not indicative of future trends.
3. As of 7/31/13.
4. The hypothetical scenario includes the 4.25% sales charge applicable to the initial fund investment but does not take into account federal, state or municipal taxes. If taxes were taken into account, the hypothetical values shown would have been lower. On 5/1/94, the fund implemented a Rule 12b-1 plan, which affects subsequent performance. The fund offers other share classes, subject to different fees and expenses that will affect their performance. Please see the fund's prospectus for more information about fees and expenses.
5. Source: Morningstar®, 7/31/13. There were 724 funds in Morningstar's Conservative Allocation category average for the 1-year period ended 7/31/13. Morningstar's 12-month yield calculations do not include a sales charge.
6. Source: Morningstar®, 7/31/13. For each fund with at least a 3-year history, Morningstar calculates a risk-adjusted return measure that accounts for variation in a fund's monthly performance (including the effects of all sales charges), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive a Morningstar Rating™ of 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10%receive 1 star. (Each share class is counted as a fraction of one fund and rated separately.) The fund received Morningstar Ratings of 4, 3 and 4 stars for the 3-, 5- and 10-year periods, respectively, as of 7/31/13. Past performance does not guarantee future results. Morningstar Rating™ is for Class A shares only; other classes may have different performance characteristics.
7. Source: Morningstar®, 7/31/13. There were 584 funds in Morningstar's Conservative Allocation category average for the 3-year period ended 7/31/13. Morningstar category average performance return calculations do not include a sales charge.
8. Effective 5/1/94, the fund implemented a Rule 12b-1 plan, which affects subsequent performance. The fund offers other share classes, subject to different fees and expenses that will affect their performance.
9. The 30-Day Standardized Yield reflects an estimated yield to maturity. It should be regarded as an estimate of the fund's rate of investment income, and it may not equal the fund's actual income distribution rate, which reflects the fund's past dividends paid to shareholders.
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