Franklin Templeton is commemorating the 75th anniversary of its Franklin Income strategy, introduced in 1948 with the launch of Franklin Income Fund [Nasdaq: FRIAX]. The fund’s continued popularity may be owed to the practical benefits offered by its monthly dividends; Franklin Income Fund has now paid uninterrupted dividends for 75 years.1 A cornerstone of compounding returns, dividends can help people accumulate money for retirement and provide the monthly income needed when they eventually retire. As of July 31, 2023, the fund had more than $72 billion in assets under management.
“Franklin Income Fund was introduced by the company’s founder Rupert H. Johnson Sr. to address investors’ need for income, particularly in their retirement years,” said Jenny Johnson, president and CEO of Franklin Templeton. “The need for sustainable and regular dividends transcends geographies, and we are thrilled that this flagship strategy is now available across the globe.”
A Flexible Approach
Franklin Income 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 in both fixed income and equity securities.
“The hallmark of the strategy is not just generating income, but ensuring portfolios are capable of delivering income on a consistent basis for clients,” said Ed Perks, CIO of Franklin Income Investors and lead portfolio manager of Franklin Income Fund. “Thinking back to the strategy in its earliest form, it was such an elegant solution for clients looking for income. Given our broad opportunity set and ability to invest in a wide range of assets, there is truly not an asset class, region or type of private or public asset that we can’t consider to achieve our investment objective. Drawing upon the extensive insights and research capabilities across our firm, we look across the capital structure of individual companies for the most attractive income opportunities to pass along to our investors.”
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, former Franklin Templeton CEO Charles B. Johnson, joined as a manager of the fund in 1957. The fund has only had three lead managers in its history, the first being the company’s founder Rupert H. Johnson Sr., who launched the strategy in 1948.
The fund’s portfolio managers, also including Brendan Circle and Todd Brighton, leverage the combined investment expertise of the more than 200 investment professionals across the Franklin Equity Group and Franklin Templeton Fixed Income investment teams, who perform bottom-up analysis to identify attractive investment opportunities in their respective areas of research. The portfolio managers also leverage the expertise of Franklin Templeton Investment Solutions, whose 70-plus investment professionals specialize in strategic asset allocation and tactical positioning, fundamental and quantitative research, active integration, and risk management.
Initially only available to US investors via Franklin Income Fund, the Franklin Income strategy is now available across regions—APAC, EMEA and Americas. US offerings also now include separately managed accounts, subadvised strategies, and Franklin Managed Income Fund. Franklin Income Investors also recently launched a newly designed strategy, the Franklin Income Focus ETF (INCM), an actively managed, multi-asset ETF that pursues income and is listed on NYSE for US investors.
About Franklin Templeton
Franklin Resources, Inc. [NYSE: BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.4 trillion in assets under management as of July 31, 2023. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.
Dividends and capital gains will vary depending on the fund’s income. There is no guarantee the fund will pay dividends and distributions and past distributions are not indicative of future trends. For more information on historical distributions, see the Franklin Income Fund’s webpage here.
Funds, ETFs, SMAs and subadvised strategies offer different choices to access professional investment management, but have important differences including with respect to fees, ownership structure, investment minimums, customization and tax efficiency. Account minimums and other requirements may apply for separately managed accounts and subadvised accounts.
Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as local laws and regulation permits. Please consult your own financial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction.
What are the risks?
All investments involve risks, including possible loss of principal.
Franklin Income Fund & Managed Income Fund::
Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value. Equity securities are subject to price fluctuation and possible loss of principal. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. These and other risks are discussed in the fund’s prospectus.
Franklin Income Focus ETF:
The fund is newly organized, with a limited history of operations. 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. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Investments in equity index-linked notes often have risks similar to their underlying securities, which could include management risk, market risk and, as applicable, foreign securities and currency risks. The allocation of assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance. 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.
ETFs trade like stocks, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.
ETF shares may be bought or sold throughout the day at their market price, not their Net Asset Value (NAV), on the exchange on which they are listed. Shares of ETFs are tradable on secondary markets and may trade either at a premium or a discount to their NAV on the secondary market.
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE.
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“The need for sustainable and regular dividends transcends geographies, and we are thrilled that this flagship strategy is now available across the globe,” said Jenny Johnson, president and CEO of Franklin Templeton.