Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
FYI: Some mutual funds are harder to judge than others because they have no obvious benchmark to measure them against. But we found a way to evaluate the performance of one such fund, the $80 billion Franklin Income fund (FKINX), by creating a portfolio of exchange-traded funds to act as a benchmark. Regards, Ted https://www.wsj.com/articles/a-closer-look-at-a-popular-fund-for-yield-1494209100
Not a subscriber of the WSJ ... So, I could not read the linked article. But, it seems more and more funds that Old_Skeet owns are becoming the making of articles. I have owned Franking Income fund since my teenage years which dates back to the 60's. Regardless of the article's content I feel it has served me well through the years.
I'm also thinking that if you own something through the years ... and it has served you well ... and, folks are writting about it ... Well, it must be a keeper.
Thanks ... With the second attempt to the link, I got to the article. Indeed, FKINX gave them something to write about thus collecting their fees. Now, I wonder what the account wrap fee was for the brokerage firm that held the etf's in thier hypo fund? Seems, to me, they left part of the story out!
The author seems to simply be reaching for a reason to not like the fund.
They say it's hard to compare the fund because "The nearly 70-year-old Franklin Income fund hasn’t had a clear benchmark for all those years because most of its investments are in five different asset classes—domestic and foreign dividend-paying stocks, investment-grade bonds, high-yield (or junk) bonds and convertible bonds—to generate current income."
And this is bad..why?
"The picture is even muddier because the asset mix can shift dramatically over time, and some of the convertibles can be “synthetic”—swaps that give the fund an enhanced yield on a common stock in exchange for forgoing some potential price appreciation but accepting all potential depreciation."
I would say that shifting assets to enhance performance is why you might choose active management in the first place. FKINX is the largest individual holding in my taxable account, acquired though inheritance. Thanks Dad.
Comments
I'm also thinking that if you own something through the years ... and it has served you well ... and, folks are writting about it ... Well, it must be a keeper.
Think I'll keep it a while longer.
Regards,
Ted
They say it's hard to compare the fund because "The nearly 70-year-old Franklin Income fund hasn’t had a clear benchmark for all those years because most of its investments are in five different asset classes—domestic and foreign dividend-paying stocks, investment-grade bonds, high-yield (or junk) bonds and convertible bonds—to generate current income."
And this is bad..why?
"The picture is even muddier because the asset mix can shift dramatically over time, and some of the convertibles can be “synthetic”—swaps that give the fund an enhanced yield on a common stock in exchange for forgoing some potential price appreciation but accepting all potential depreciation."
I would say that shifting assets to enhance performance is why you might choose active management in the first place. FKINX is the largest individual holding in my taxable account, acquired though inheritance. Thanks Dad.