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Any investors hoping to find a Mutual Fund Bond fund might consider looking past Franklin Federal Tax-Free Income A (FKTIX - Free Report) . FKTIX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FKTIX. The Franklin Federal Tax-Free Income A made its debut in October of 1983 and FKTIX has managed to accumulate roughly $6.19 billion in assets, as of the most recently available information. 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. FKTIX has a 5-year annualized total return of 1.35% and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.31%, which places it in the middle 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. FKTIX's standard deviation over the past three years is 5.5% compared to the category average of 12.87%. Looking at the past 5 years, the fund's standard deviation is 4.45% compared to the category average of 11.34%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.84, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FKTIX has a negative alpha of -0.47, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, FKTIX has 49.17% in high quality bonds rated at least 'AA' or higher, while 45.95% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, FKTIX is a load fund. It has an expense ratio of 0.63% compared to the category average of 0.79%. From a cost perspective, FKTIX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Bottom Line
Overall, Franklin Federal Tax-Free Income A ( FKTIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Your research on the Mutual Fund Bond segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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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Is FKTIX a Strong Bond Fund Right Now?
Any investors hoping to find a Mutual Fund Bond fund might consider looking past Franklin Federal Tax-Free Income A (FKTIX - Free Report) . FKTIX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Franklin Templeton is based in San Mateo, CA, and is the manager of FKTIX. The Franklin Federal Tax-Free Income A made its debut in October of 1983 and FKTIX has managed to accumulate roughly $6.19 billion in assets, as of the most recently available information. 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. FKTIX has a 5-year annualized total return of 1.35% and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.31%, which places it in the middle 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. FKTIX's standard deviation over the past three years is 5.5% compared to the category average of 12.87%. Looking at the past 5 years, the fund's standard deviation is 4.45% compared to the category average of 11.34%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.84, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FKTIX has a negative alpha of -0.47, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, FKTIX has 49.17% in high quality bonds rated at least 'AA' or higher, while 45.95% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, FKTIX is a load fund. It has an expense ratio of 0.63% compared to the category average of 0.79%. From a cost perspective, FKTIX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Bottom Line
Overall, Franklin Federal Tax-Free Income A ( FKTIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Your research on the Mutual Fund Bond segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.