Any investors hoping to find a Sector – Precious Metal fund could think about starting with Franklin Gold & Precious Metals A (FKRCX). FKRCX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Sector – Precious Metal funds is an area filled with options, such as FKRCX. Usually, Sector – Precious Metal mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. Here, stocks often trade as leveraged bets of the underlying commodity, meaning they’re tied to the metal’s prices and can be volatile.
History of Fund/Manager
Franklin is based in San Mateo, CA, and is the manager of FKRCX. Franklin Gold & Precious Metals A made its debut in May of 1969, and since then, FKRCX has accumulated about $2.06 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund’s current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 18.81%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 44.18%, which places it in the top third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
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. FKRCX’s standard deviation over the past three years is 37.76% compared to the category average of 17.1%. The standard deviation of the fund over the past 5 years is 36.03% compared to the category average of 18.12%. 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 0.82, so it is likely going to be less volatile than the market at large. 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. The fund has produced a positive alpha over the past 5 years of 12.55, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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