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Is Franklin Mutual Shares Z (MUTHX) a Strong Mutual Fund Pick Right Now?

·4 min read

Having trouble finding a Mutual Fund Equity Report fund? Well, Franklin Mutual Shares Z (MUTHX) would not be a good potential starting point right now. MUTHX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Franklin is based in San Mateo, CA, and is the manager of MUTHX. Since Franklin Mutual Shares Z made its debut in October of 1949, MUTHX has garnered more than $3.88 billion in assets. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.72%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 4.32%, which places it in the bottom 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. MUTHX's standard deviation over the past three years is 19.77% compared to the category average of 16.31%. Looking at the past 5 years, the fund's standard deviation is 17.28% compared to the category average of 14.47%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. MUTHX has a 5-year beta of 0.88, which means it is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -6.05. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.

This fund is currently holding about 88.96% stock in stocks, with an average market capitalization of $75.42 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance

  2. Technology

  3. Non-Durable

With turnover at about 69.94%, this fund is making fewer trades than the average comparable fund.

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, MUTHX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 1.09%. From a cost perspective, MUTHX is actually cheaper than its peers.

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 Mutual Shares Z ( MUTHX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Franklin Mutual Shares Z ( MUTHX ) looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare MUTHX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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