SCHAX
Franklin Multi-Asset Growth Fund A
Dynamic Asset Allocation for Growth
The Franklin Multi-Asset Growth Fund A (SCHAX) is designed to seek capital appreciation through a dynamic asset allocation strategy. The fund’s management team actively adjusts its holdings among various Smith Barney Funds, taking into account market factors, economic conditions, and the performance of underlying funds. This approach allows the fund to capitalize on growth opportunities across different sectors and asset classes, making it an attractive option for investors seeking aggressive growth. The fund’s ability to adapt to changing market conditions is a key feature that sets it apart from more static investment options.
At A Glance
Executive Summary
SCHAX offers dynamic asset allocation with a focus on aggressive growth, featuring a diverse portfolio and competitive returns.
Dynamic asset allocation strategy Strong 1-year return of 30.10% Diverse sector and asset class exposure
Higher expense ratio at 1.12% Negative alpha and Sharpe ratio Potential volatility due to aggressive strategy
Impressive Recent Performance
SCHAX has demonstrated impressive performance over the past year, with a 1-year return of 30.10%, significantly outperforming its benchmark, the S&P 500 Total Return Index, which returned 37.62%. This strong performance is indicative of the fund’s effective asset allocation strategy and its ability to capture growth in various market conditions. The fund’s annualized returns over five years stand at 9.43%, showcasing its potential for long-term growth. However, investors should be aware of the fund’s aggressive nature, which may lead to higher volatility compared to more conservative investment options.
Sector and Asset Class Diversification
The Franklin Multi-Asset Growth Fund A offers a well-diversified portfolio across multiple sectors and asset classes. With a significant allocation to technology (26.66%), financials (15.56%), and healthcare (12.95%), the fund is positioned to benefit from growth in these dynamic sectors. Additionally, the fund’s asset class allocation includes a substantial portion in U.S. equities (71.67%), providing exposure to the robust U.S. market. This diversification helps mitigate risks associated with individual sector downturns and enhances the fund’s potential for capital appreciation.
Risk Metrics and Volatility Considerations
Investors considering SCHAX should be mindful of its risk metrics, which reflect its aggressive growth strategy. The fund has a beta of 0.85, indicating lower volatility compared to the benchmark, yet its negative alpha of -7.56% and Sharpe ratio of -0.69 suggest challenges in achieving risk-adjusted returns. The fund’s standard deviation of 3.15% and downside risk of 1.67% highlight potential volatility. Despite these risks, the fund’s dynamic allocation strategy aims to optimize returns by adjusting exposure based on market conditions, which can be appealing to investors with a higher risk tolerance.
Competitive Expense Ratio Analysis
The Franklin Multi-Asset Growth Fund A has an expense ratio of 1.12%, which is relatively higher compared to some of its peers, such as JPMorgan Investor Growth-A (ONGAX) with an expense ratio of 0.55%. While this may be a consideration for cost-conscious investors, the fund’s dynamic asset allocation strategy and strong recent performance may justify the higher fees for those seeking aggressive growth. It’s important for investors to weigh the potential benefits of the fund’s strategy against the cost of investing, especially when considering long-term investment horizons.
Comparative Analysis with Similar Funds
When compared to similar funds, SCHAX holds its ground with a strong 1-year return of 30.10%. For instance, Calamos Growth & Income-A (CVTRX) and Aristotle Optimization Aggressive Growth-A (POEAX) have 1-year returns of 29.76% and 29.99%, respectively. However, SCHAX’s higher expense ratio and negative alpha may be points of concern. Despite these factors, SCHAX’s dynamic asset allocation and sector diversification provide a competitive edge, particularly for investors focused on aggressive growth strategies. This comparative analysis highlights the importance of evaluating both performance and cost when selecting a fund.
Max Drawdown and Recovery Insights
The fund experienced a maximum drawdown of -7.2% between July and August 2024, with a quick recovery, indicating resilience in volatile market conditions. This drawdown is relatively moderate for an aggressive growth fund, suggesting effective risk management by the fund’s managers. The ability to recover swiftly from market downturns is a crucial factor for investors seeking growth with manageable risk. This resilience, combined with the fund’s dynamic allocation strategy, makes SCHAX a compelling choice for those willing to accept short-term volatility for potential long-term gains.
Conclusion: Suitability for Aggressive Investors
In conclusion, the Franklin Multi-Asset Growth Fund A (SCHAX) stands out for its dynamic asset allocation strategy and strong recent performance, making it suitable for investors with an aggressive growth focus. While the fund’s higher expense ratio and risk metrics may deter some, its ability to adapt to market conditions and capitalize on growth opportunities offers significant appeal. Investors seeking a diversified portfolio with exposure to high-growth sectors and a willingness to accept volatility may find SCHAX an excellent addition to their investment strategy.
Similar Securities
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TRSGX: TRPrice Spectrum Moderate Growth | Balanced Aggressive Fund
TRSGX offers a balanced aggressive approach with 80% equity, 20% bonds, and a 0.78% expense ratio, ideal for growth-focused investors.
ACEIX: Invesco Equity & Income-A | Balanced Aggressive Growth & Income
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MUTHX: Franklin Mutual Shares-Z | Aggressive Growth and Income Fund
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BAAPX: BlackRock 80/20 Target Allocation-A | Aggressive Growth Fund
BAAPX offers aggressive growth with a 0.65% expense ratio, focusing on equity securities for high-risk investors.
Futher Reading
https://finance.yahoo.com/quote/SCHAX/”>Yahoo: Franklin Multi-Asset Growth Fund A
https://ftcloud.fasttrack.net/web/chart/SCHAX
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