There are plenty of choices in the Sector – Precious Metal category, but where should you start your research? Well, one fund that might be worth investigating is Franklin Gold & Precious Metals A (FKRCX). FKRCX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
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.
Franklin is responsible for FKRCX, and the company is based out of San Mateo, CA. Franklin Gold & Precious Metals A made its debut in May of 1969, and since then, FKRCX has accumulated about $2.28 billion in assets, per the most up-to-date date available. Steve Land is the fund’s current manager and has held that role since April of 1999.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 25.43%, and it sits 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 52.57%, 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. Compared to the category average of 16.24%, the standard deviation of FKRCX over the past three years is 33.62%. Over the past 5 years, the standard deviation of the fund is 33.19% compared to the category average of 17.35%. This makes the fund more volatile than its peers over the past half-decade.
With a 5-year beta of 0.75, the fund 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 positive alpha of 17.2. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, FKRCX is a load fund and it has an expense ratio of 0.87%.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
This puts this fund from Franklin in the top 20% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Sector – Precious Metal category.
For additional information on this product, or to compare it to other mutual funds in the Sector – Precious Metal, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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This article originally published on Zacks Investment Research (zacks.com).