FLRSX
2030 Franklin LifeSmart Retrmnt Trgt-A
Strategic Asset Allocation for 2030 Retirees
The 2030 Franklin LifeSmart Retirement Target Fund (FLRSX) is designed for investors planning to retire around the year 2030. This target-date fund aims to provide the highest level of long-term total return consistent with its asset allocation strategy. As investors approach retirement, the fund gradually shifts its asset allocation to become more conservative, reducing exposure to equities and increasing holdings in bonds and other fixed-income securities. This strategic approach is intended to balance growth potential with risk management, making it suitable for those nearing retirement who seek a blend of capital appreciation and income stability.
At A Glance
Executive Summary
FLRSX offers strategic asset allocation for 2030 retirees with a 0.70% expense ratio, focusing on growth and stability.
Strategic asset allocation for 2030 retirees Balanced exposure to equities and bonds Managed by Franklin Templeton Investments
Higher expense ratio compared to peers Negative risk metrics like Sharpe Ratio Limited upside potential
Performance Analysis: A Mixed Bag
FLRSX has shown a mixed performance over recent years. The fund’s one-year return stands at an impressive 21.31%, significantly outperforming its benchmark, the S&P 500 Total Return Index, which returned 37.62% over the same period. However, the fund’s three-year annualized return is a modest 2.57%, and its five-year return is 7.03%. These figures suggest that while the fund has had strong short-term performance, its longer-term returns are less competitive. Investors should consider these performance metrics in the context of their own investment timelines and risk tolerance.
Risk Metrics: Navigating Volatility
The risk metrics for FLRSX indicate a cautious approach to market volatility. With a beta of 0.62, the fund is less volatile than the market, which is reflected in its lower standard deviation of 2.44%. However, the fund’s negative alpha of -16.35% and Sharpe Ratio of -1.94 suggest that it has not been able to generate returns commensurate with its risk level. The Treynor Ratio of -26.23 further highlights the fund’s struggle to achieve risk-adjusted returns. These metrics underscore the importance of understanding the fund’s risk profile, especially for investors nearing retirement who may prioritize capital preservation.
Portfolio Composition: A Diverse Mix
FLRSX’s portfolio is a diverse mix of asset classes and sectors, designed to provide balanced exposure to both growth and income opportunities. The fund’s top holdings include Franklin U.S. Core Equity Advisor and Franklin U.S. Core Bond ETF, which together account for over 34% of the portfolio. Sector allocation is heavily weighted towards technology (25.73%), followed by financials (14.60%) and healthcare (12.39%). This diversified approach aims to capture growth in key sectors while maintaining stability through fixed-income investments. The fund’s bond sector allocation is predominantly in government and corporate bonds, providing a stable income stream.
Comparative Analysis: Expense and Yield
When compared to similar funds, FLRSX’s expense ratio of 0.70% is higher than some of its peers, such as the 2035 Putnam Retirement Advantage-A (PDFLX) with an expense ratio of 0.008%. However, FLRSX offers a competitive yield of 1.97%, which is comparable to other target-date funds like the 2030 MassMutual Select TRP Retirement-I (MMTRX) with a yield of 2.01%. Investors should weigh the higher expense ratio against the fund’s strategic asset allocation and yield potential, considering whether the fund’s approach aligns with their investment goals and cost expectations.
Sector and Market Cap Allocation: Targeted Growth
FLRSX’s sector and market cap allocation reflect a targeted approach to growth. The fund’s significant allocation to technology (25.73%) positions it to benefit from advancements in this rapidly evolving sector. Additionally, the fund’s market cap allocation is skewed towards large (23.66%) and extra-large (25.54%) companies, which are typically more stable and have the potential for steady growth. This allocation strategy is designed to capture the upside potential of established companies while mitigating the risks associated with smaller, more volatile firms. Investors seeking growth opportunities in large-cap stocks may find this fund’s allocation appealing.
Max Drawdown and Recovery: Resilience in Downturns
FLRSX has demonstrated resilience during market downturns, as evidenced by its max drawdown of -4.8%. The fund’s ability to recover quickly, with a drawdown length of just one month and no recovery period, highlights its capacity to withstand market volatility. This resilience is crucial for investors nearing retirement, as it suggests the fund can protect capital during turbulent times. The fund’s downside risk (UI) of 1.32 further indicates its ability to manage losses effectively. These characteristics make FLRSX a potentially attractive option for risk-averse investors seeking stability in their retirement portfolios.
Conclusion: A Balanced Choice for 2030 Retirees
In conclusion, the 2030 Franklin LifeSmart Retirement Target Fund (FLRSX) offers a balanced approach to asset allocation for investors planning to retire around 2030. While the fund’s expense ratio is higher than some peers, its strategic allocation to equities and bonds provides a blend of growth and income potential. The fund’s performance metrics and risk profile suggest it is suitable for investors seeking a conservative investment strategy with moderate growth potential. FLRSX’s resilience in downturns and diverse portfolio composition make it a compelling choice for those nearing retirement who prioritize stability and capital preservation.
Similar Securities
TRRJX: 2035 TRPrice Retirement Fund | Balanced Growth and Income
TRRJX offers a balanced approach to growth and income with a 0.59% expense ratio, outperforming peers in 1-year returns.
BRICX: 2030 BlackRock Retirement Income-Inst | High Yield Target Date Fund
BRICX offers a high yield of 8.51% with a diversified portfolio, focusing on income generation for retirees. Its expense ratio is competitive at 0.75%.
PRRYX: 2035 Putnam Sustainable Retirement-Y | Balanced Growth and Income
PRRYX offers a low expense ratio and a sustainable investment approach, focusing on ESG criteria, making it unique among target date funds.
LENAX: 2030 BlackRock LifePath ESG IxFd-InvA | ESG-Focused Retirement Fund
LENAX offers ESG-focused asset allocation for 2030 retirees with a 0.5% expense ratio, emphasizing sustainability and moderate risk.
TRRCX: 2030 TRPrice Retirement Fund | Balanced Growth & Income
TRRCX offers a balanced approach for 2030 retirees with a 0.56% expense ratio and diverse asset allocation, focusing on growth and income.
Futher Reading
https://www.morningstar.com/funds/xnas/FLRSX/quote
https://finance.yahoo.com/quote/FLRSX/”>Yahoo: 2030 Franklin LifeSmart Retrmnt Trgt-A
https://ftcloud.fasttrack.net/web/chart/FLRSX
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