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Is FKTFX a Strong Bond Fund Right Now?

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Any investors hoping to find a Mutual Fund Bond fund could think about starting with Franklin California Tax-Free Income A (FKTFX - Free Report) . FKTFX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

FKTFX finds itself in the Franklin family, based out of San Mateo, CA. The Franklin California Tax-Free Income A made its debut in February of 1977 and FKTFX has managed to accumulate roughly $8.17 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 1.88%, and is 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 0.39%, 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. FKTFX's standard deviation over the past three years is 7.57% compared to the category average of 13.79%. The fund's standard deviation over the past 5 years is 6.81% compared to the category average of 13.48%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 1.03, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, FKTFX has a negative alpha of -0.26, 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, FKTFX has 54.32% in high quality bonds rated at least 'AA' or higher, while 25.56% 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

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, FKTFX is a load fund. It has an expense ratio of 0.62% compared to the category average of 0.78%. Looking at the fund from a cost perspective, FKTFX is actually cheaper than its peers.

Investors should also note, that according to our data, the fund does not have any minimum investment requirements.

Bottom Line

Overall, Franklin California Tax-Free Income A ( FKTFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Mutual Fund Bond 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 FKTFX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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