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Is Franklin Dynatech Fund Class A (FKDNX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is Franklin Dynatech Fund Class A (FKDNX). FKDNX carries a Zacks Mutual Fund Rank of 2 (Buy), 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 FKDNX. Franklin Dynatech Fund Class A debuted in January of 1968. Since then, FKDNX has accumulated assets of about $8.92 billion, according to the most recently available information. The fund's current manager, Rupert H. Johnson Jr.Has been in charge of the fund since January of 1968.

Performance

Investors naturally seek funds with strong performance. FKDNX has a 5-year annualized total return of 13.98% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 9.36%, 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. The standard deviation of FKDNX over the past three years is 25.18% compared to the category average of 16.52%. Looking at the past 5 years, the fund's standard deviation is 22.36% compared to the category average of 14.81%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.11, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a positive alpha of 0.7, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Examining 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 largely on equities that are traded in the United States.

As of the last filing date, the mutual fund has 97.85% of its assets in stocks, which have an average market capitalization of $397.71 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Retail Trade
With turnover at about 50.1%, this fund makes fewer trades than the average comparable fund.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FKDNX is a load fund. It has an expense ratio of 0.77% compared to the category average of 1.30%. Looking at the fund from a cost perspective, FKDNX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Franklin Dynatech Fund Class A ( FKDNX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, Franklin Dynatech Fund Class A ( FKDNX ) looks like a good potential 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 FKDNX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.




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