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Is Franklin Real Estate Security A (FREEX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Sector - Real Estate fund? Starting with Franklin Real Estate Security A (FREEX - Free Report) should not be a possibility at this time. FREEX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FREEX in Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players--almost bond-like in some cases--though their risk is similar to equities.
History of Fund/Manager
Franklin is based in San Mateo, CA, and is the manager of FREEX. Franklin Real Estate Security A debuted in January of 1994. Since then, FREEX has accumulated assets of about $208.01 million, according to the most recently available information. The fund's current manager, Daniel Scher, has been in charge of the fund since May of 2014.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.8%, and it sits 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 -2.59%, which places it in the bottom 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. FREEX's standard deviation over the past three years is 21.7% compared to the category average of 15.92%. Over the past 5 years, the standard deviation of the fund is 20.18% compared to the category average of 16.5%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FREEX has a 5-year beta of 0.96, which means it is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -9.87. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FREEX is a load fund. It has an expense ratio of 1.12% compared to the category average of 0.97%. FREEX is actually more expensive than its peers when you consider factors like cost.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Franklin Real Estate Security A ( FREEX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Franklin Real Estate Security A ( FREEX ) looks like a somewhat weak choice for investors right now.
Your research on the Sector - Real Estate 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 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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Is Franklin Real Estate Security A (FREEX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Sector - Real Estate fund? Starting with Franklin Real Estate Security A (FREEX - Free Report) should not be a possibility at this time. FREEX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes FREEX in Sector - Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector - Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players--almost bond-like in some cases--though their risk is similar to equities.
History of Fund/Manager
Franklin is based in San Mateo, CA, and is the manager of FREEX. Franklin Real Estate Security A debuted in January of 1994. Since then, FREEX has accumulated assets of about $208.01 million, according to the most recently available information. The fund's current manager, Daniel Scher, has been in charge of the fund since May of 2014.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.8%, and it sits 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 -2.59%, which places it in the bottom 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. FREEX's standard deviation over the past three years is 21.7% compared to the category average of 15.92%. Over the past 5 years, the standard deviation of the fund is 20.18% compared to the category average of 16.5%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FREEX has a 5-year beta of 0.96, which means it is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -9.87. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FREEX is a load fund. It has an expense ratio of 1.12% compared to the category average of 0.97%. FREEX is actually more expensive than its peers when you consider factors like cost.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Franklin Real Estate Security A ( FREEX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Franklin Real Estate Security A ( FREEX ) looks like a somewhat weak choice for investors right now.
Your research on the Sector - Real Estate 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 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.