FRBSX
Franklin Mutual US MidCap Value-A
Introduction to Franklin Mutual US MidCap Value-A
Franklin Mutual US MidCap Value-A (FRBSX) is a mutual fund designed to provide investors with high total returns through a combination of capital appreciation and income. Managed by Franklin Templeton Investments, this fund focuses on midcap stocks that are perceived to be undervalued but have significant potential for growth. With an expense ratio of 0.90% and a yield of 1.06%, FRBSX is positioned as a compelling option for investors seeking a blend of growth and income within the midcap value category. The fund’s strategy is to identify and invest in securities that are currently undervalued by the market, offering a unique opportunity for capital appreciation.
At A Glance
Executive Summary
FRBSX offers undervalued midcap exposure with a 0.90% expense ratio and 1.06% yield, ideal for value-focused investors seeking growth and income.
Potential for capital appreciation and income; Focus on undervalued midcap stocks; Managed by Franklin Templeton Investments.
Higher expense ratio compared to peers; Negative alpha and Sharpe ratio; Limited bond exposure.
Performance Analysis: A Year of Strong Returns
In the past year, FRBSX has delivered a robust return of 30.15%, showcasing its ability to capitalize on undervalued opportunities within the midcap sector. This performance, while slightly trailing the S&P 500 Total Return Index’s 37.62%, highlights the fund’s potential in capturing value-driven growth. Over a five-year period, the fund has achieved an annualized return of 8.62%, and since inception, it has maintained a solid 9.81% return. These figures underscore the fund’s consistent performance in delivering returns over various market cycles, making it an attractive option for investors looking for long-term growth in the midcap space.
Portfolio Composition: A Focus on Industrials and Financials
FRBSX’s portfolio is heavily weighted towards the industrials and financial sectors, which together constitute over 37% of its holdings. This strategic allocation reflects the fund’s emphasis on sectors that are often undervalued yet poised for growth. The top holdings include companies like PNC Financial Services Group Inc and Entergy Corp, which are indicative of the fund’s focus on stable, income-generating stocks. Additionally, the fund maintains a significant allocation in technology and healthcare, sectors known for their growth potential. This diversified sector allocation helps mitigate risk while providing exposure to various growth opportunities within the midcap space.
Risk Metrics: Understanding the Volatility
FRBSX exhibits a beta of 0.84, indicating lower volatility compared to the broader market, as represented by the S&P 500. However, the fund’s negative alpha of -7.51% and Sharpe ratio of -0.56 suggest that it has underperformed on a risk-adjusted basis. The standard deviation of 3.84% reflects moderate volatility, while the Treynor ratio of -8.94 highlights challenges in achieving returns relative to its risk exposure. Despite these metrics, the fund’s downside risk is relatively contained, with a downside risk (UI) of 2.72, suggesting that while the fund may face challenges in outperforming the market, it offers a degree of stability in turbulent times.
Comparative Analysis: How FRBSX Stacks Up Against Peers
When compared to similar funds such as Commerce MidCap Growth (CFAGX) and AMG TimesSquare MidCap Growth-Z (TMDIX), FRBSX offers a unique value proposition with its focus on undervalued midcap stocks. While its expense ratio of 0.90% is higher than some peers, the fund’s strategy of targeting undervalued opportunities provides a distinct advantage for value-focused investors. The fund’s yield of 1.06% also stands out, offering an income component that is not as prevalent in some growth-oriented peers. This makes FRBSX a suitable choice for investors seeking both growth and income in the midcap value segment.
Sector Allocation: A Balanced Approach to Growth and Stability
The sector allocation of FRBSX is designed to balance growth potential with stability. With significant investments in industrials (22.00%) and financials (15.37%), the fund is well-positioned to benefit from economic recovery and growth. The inclusion of sectors like technology (8.75%) and healthcare (9.27%) adds a layer of growth potential, while the presence of utilities (8.29%) and real estate (8.10%) provides a buffer against market volatility. This diversified approach ensures that the fund can capitalize on various market trends while maintaining a stable income stream, making it an attractive option for investors looking for a balanced midcap value fund.
Investment Strategy: Targeting Undervalued Opportunities
FRBSX employs a value-oriented investment strategy, focusing on midcap stocks that are undervalued by the market but have the potential for significant capital appreciation. This approach is rooted in the belief that market inefficiencies can be exploited to generate superior returns. The fund’s managers leverage their expertise to identify companies with strong fundamentals that are temporarily out of favor. This strategy not only aims to capture growth but also provides a margin of safety, as undervalued stocks often have limited downside risk. For investors seeking a disciplined approach to value investing, FRBSX offers a compelling opportunity to participate in the growth of midcap companies.
Conclusion: Is FRBSX the Right Fit for Your Portfolio?
FRBSX stands out as a strong contender for investors seeking a blend of growth and income through undervalued midcap stocks. Its focus on sectors with growth potential, combined with a disciplined value investment strategy, makes it an attractive option for those looking to diversify their portfolios with midcap exposure. While the fund’s higher expense ratio and risk metrics may be a consideration, its consistent performance and income component offer a balanced approach to investing. For value-focused investors who are comfortable with moderate risk and seek long-term capital appreciation, FRBSX presents a viable investment opportunity.
Similar Securities
JAMVX: Janus Henderson VIT MidCap Value-Inst | MidCap Value Growth Fund
JAMVX offers a strategic focus on undervalued mid-cap stocks with a competitive expense ratio of 0.68%, aiming for capital growth.
MDRFX: BlackRock MidCap Value-InvA | MidCap Value Investment
MDRFX offers mid-cap value exposure with a focus on undervalued equities, a 1% expense ratio, and a 1.69% yield, suitable for growth-oriented investors.
VVOAX: Invesco Value Opportunities-A | MidCap Value Growth & Income
VVOAX offers a unique blend of growth and income with a focus on undervalued midcap stocks, boasting a 51.16% 1-year return and a 1.07% expense ratio.
JNMCX: Janus Henderson MidCap Value-D | MidCap Value Growth Fund
JNMCX offers midcap value growth with a 0.78% expense ratio and 1.04% yield, focusing on mid-sized companies for capital appreciation.
TRMCX: TRPrice MidCap Value Fund | Value-Oriented MidCap Growth
TRMCX offers a value-oriented approach with a 0.85% expense ratio, focusing on undervalued mid-sized companies for long-term growth.
Futher Reading
https://finance.yahoo.com/quote/FRBSX/”>Yahoo: Franklin Mutual US MidCap Value-A
https://ftcloud.fasttrack.net/web/chart/FRBSX
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