Franklin Templeton Investments is commemorating the 65th
anniversary of the Franklin Income Fund (NASDAQ: FKINX). Introduced
on August 31, 1948, Franklin Income Fund has delivered income to
investors through up, down and sideways markets. US Baby Boomers
are turning 65 at a rate of 10,000 per day.(1) While many of them
are making plans to retire, Franklin Income Fund plans to continue
working to deliver income to all of its investors, including Baby
Boomers. The fund has paid uninterrupted dividends for 65 years,(2)
providing the ongoing cash flow that many have counted on and
continue to count on in their retirement years. Today, the fund has
more than $79 billion in assets under management.(3)
"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:
Since
Inception
1-Year 3-year 5-Year 10-Year (8/31/48)
With Maximum 4.25% Sales
Charge(8) 6.67% 9.77% 5.45% 7.18% 10.40%
Without Sales Charge(8) 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. (NYSE: BEN), a global investment management
organization operating as Franklin Templeton Investments. Franklin
Templeton Investments provides global and domestic investment
management solutions managed by its Franklin, Templeton, Mutual
Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management
and K2 investment teams. The San Mateo, CA-based company has more
than 65 years of investment experience and over $834 billion in
assets under management as of July 31, 2013. For more information,
please call 1-800/DIAL BEN® or visit franklintempleton.com.
Connect with Franklin Templeton on Twitter (@FTI_US), Facebook
and YouTube (FranklinTempletonTV).
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.
Copyright © 2013. Franklin Templeton Investments. All rights
reserved.
Contact: Franklin Templeton Investments Corporate Communications
Stacey Coleman 650-525-7458 franklintempleton.com
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