MQIFX
Franklin Mutual Quest-Z
Global Value Investment Strategy
Franklin Mutual Quest-Z (MQIFX) is a mutual fund that seeks capital appreciation with a secondary goal of income generation. The fund primarily invests in equity securities of both U.S. and foreign companies that are perceived to be undervalued. This value-oriented approach aims to capitalize on market inefficiencies by identifying stocks trading below their intrinsic value. The fund’s strategy is particularly appealing to investors looking for global diversification while focusing on value investing principles. With a yield of 4.12%, MQIFX offers an attractive income component, making it suitable for investors seeking both growth and income.
At A Glance
Executive Summary
MQIFX offers global equity exposure with a focus on undervalued stocks, featuring a competitive yield of 4.12% and a diverse sector allocation.
Global equity exposure with undervalued stock focus. Competitive yield of 4.12%. Diverse sector allocation for risk management.
High expense ratio of 0.8%. Negative alpha indicating underperformance. High downside risk with a Treynor Ratio of -27.99.
Performance Amidst Market Volatility
MQIFX has demonstrated a mixed performance record, with a notable 1-year return of 21.85%, which is competitive within its category. However, when compared to its benchmark, the S&P 500 Total Return Index, which posted a 1-year return of 37.62%, MQIFX underperformed. The fund’s alpha of -15.82% and a Sharpe Ratio of -1.75 indicate that it has not effectively compensated investors for the risk taken. Despite these challenges, the fund’s lower beta of 0.57 suggests less volatility compared to the broader market, which may appeal to risk-averse investors.
Diverse Sector Allocation
The sector allocation of MQIFX is diverse, with significant investments in financials (21.56%), healthcare (15.89%), and industrials (9.37%). This diversification helps mitigate sector-specific risks and provides a balanced exposure to various economic segments. The fund’s allocation to defensive sectors like healthcare and financials can offer stability during economic downturns, while its exposure to cyclical sectors such as industrials and energy (7.81%) provides growth potential during economic expansions. This strategic allocation aligns with the fund’s objective of achieving capital appreciation while managing risk.
Top Holdings Reflect Strategic Choices
MQIFX’s top holdings include Sorenson Communications, Everest Group Ltd, and Elevance Health Inc, among others. These selections reflect the fund’s strategy of investing in companies with strong fundamentals and potential for value appreciation. The presence of global giants like The Walt Disney Co and Medtronic PLC further underscores the fund’s commitment to quality and stability. By focusing on companies with robust business models and competitive advantages, MQIFX aims to deliver long-term value to its investors. This approach is consistent with the fund’s value-oriented investment philosophy.
Comparative Analysis with Peers
When compared to similar funds such as Goldman Sachs Growth&Income Strategy-Inst (GOIIX) and JPMorgan Global Allocation-I (GAOSX), MQIFX holds its ground with a competitive 1-year return of 21.85%. However, its expense ratio of 0.8% is higher than some peers, which may impact net returns. Despite this, MQIFX’s yield of 4.12% is attractive compared to its peers, offering a compelling income advantage. Investors should weigh the higher expense ratio against the potential for income and the fund’s strategic global equity exposure when considering MQIFX as part of their portfolio.
Risk Metrics and Investor Implications
The risk metrics for MQIFX reveal some areas of concern, particularly its negative alpha of -15.82% and a Treynor Ratio of -27.99, indicating that the fund has not effectively managed risk relative to its returns. The fund’s downside risk, as measured by a downside risk (UI) of 1.43, suggests potential vulnerability during market downturns. However, the fund’s beta of 0.57 indicates lower volatility compared to the market, which may appeal to conservative investors. These metrics highlight the importance of understanding the fund’s risk profile and aligning it with individual investment goals and risk tolerance.
Asset and Market Cap Allocation
MQIFX’s asset allocation is predominantly in U.S. equities (55.32%) and non-U.S. equities (32.47%), providing a balanced exposure to both domestic and international markets. The fund’s market cap allocation is skewed towards medium (27.28%) and large-cap (28.08%) companies, which typically offer a blend of growth and stability. This allocation strategy supports the fund’s objective of capital appreciation by investing in companies with established market positions and growth potential. The inclusion of small-cap stocks (7.48%) adds an element of growth potential, albeit with higher risk, to the fund’s portfolio.
Conclusion: Suitability for Value-Oriented Investors
Franklin Mutual Quest-Z (MQIFX) stands out for its global value investment strategy, offering investors exposure to undervalued stocks across various sectors and geographies. With a competitive yield of 4.12% and a diverse sector allocation, the fund is well-suited for investors seeking both income and growth. However, potential investors should consider the fund’s higher expense ratio and risk metrics, which may impact overall returns. MQIFX is ideal for value-oriented investors who are comfortable with moderate risk and are looking for a fund that provides global diversification and income potential.
Similar Securities
TEPLX: Templeton Growth-A | Global Equity Growth Fund
TEPLX offers global equity exposure with a 1.04% expense ratio, focusing on long-term growth. It stands out with a diverse portfolio and strong 1-year return.
JERSX: Janus Henderson Global Real Estate-S | Global Real Estate Investment
JERSX offers global real estate exposure with a 2.45% yield, focusing on capital appreciation and income. High expense ratio but strong 1-year return.
TEMWX: Templeton World-A | Global Equity Growth Fund
TEMWX offers global diversification with a focus on large-cap equities, boasting a 32.91% 1-year return and a 1.05% expense ratio.
GBLCX: American Funds Global Balanced-C | Global Equity and Debt Exposure
GBLCX offers a balanced global portfolio with a focus on growth and income, featuring a diverse asset allocation and a 1.58% expense ratio.
RPIBX: TRPrice International Bond-Inv | Global Bond Income Strategy
RPIBX offers global bond exposure with a 3.11% yield and a focus on high credit quality, suitable for income-focused investors.
Futher Reading
https://finance.yahoo.com/quote/MQIFX/”>Yahoo: Franklin Mutual Quest-Z
Disclaimer: The information provided on this website is for informational purposes only and should not be construed as financial, investment, or other professional advice. PeepFinance does not endorse or recommend any specific securities, investments, or strategies. The opinions expressed are solely those of the authors and are not intended to be used as the basis for any investment decisions. All investments carry risks, and readers are encouraged to conduct their own research or consult with a financial professional before making any financial decisions. PeepFinance and its authors are not responsible for any losses or damages arising from the use of this information.