FSGRX
Franklin SmallCap Growth-A
Introduction to Franklin SmallCap Growth-A
Franklin SmallCap Growth-A (FSGRX) is a mutual fund designed to achieve long-term capital growth by investing primarily in small-cap U.S. companies. Managed by Franklin Templeton Investments, this fund is categorized under Small Cap Growth, making it an attractive option for investors seeking exposure to smaller, potentially high-growth companies. With an expense ratio of 1.08%, FSGRX offers a focused investment strategy aimed at capitalizing on the growth potential of small-cap stocks. The fund’s objective is to provide investors with significant capital appreciation over time, leveraging the dynamic nature of small-cap markets.
At A Glance
Executive Summary
FSGRX offers robust small-cap growth with a 45.07% 1-year return, outperforming its benchmark. Ideal for growth-focused investors.
High 1-year return of 45.07%. Strong small-cap focus with 59.80% allocation. Outperforms S&P 500 benchmark.
Higher expense ratio at 1.08%. No yield for income-focused investors. Higher beta indicates increased volatility.
Impressive Recent Performance
FSGRX has demonstrated remarkable performance over the past year, achieving a 1-year return of 45.07%, significantly outperforming its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return. This impressive performance highlights the fund’s ability to capitalize on market opportunities within the small-cap sector. The fund’s strong returns are indicative of its effective stock selection and management strategies, which have allowed it to navigate market volatility and deliver superior results. Investors looking for high returns in the small-cap space may find FSGRX’s recent performance particularly appealing.
Strategic Portfolio Composition
The portfolio of FSGRX is strategically composed to maximize growth potential, with a significant allocation to technology (28.38%) and healthcare (22.46%) sectors. These sectors are known for their innovation and growth prospects, aligning well with the fund’s objective of long-term capital appreciation. Additionally, the fund maintains a diversified approach with investments in industrials (17.74%) and cyclical sectors (13.00%), providing a balanced exposure to various economic cycles. The top holdings, including BWX Technologies Inc and Arcosa Inc, reflect the fund’s focus on companies with strong growth trajectories and market leadership in their respective industries.
Risk and Volatility Considerations
Investors should be aware of the risk metrics associated with FSGRX, which include a beta of 1.37, indicating higher volatility compared to the benchmark. The fund’s alpha of 7.41% suggests that it has outperformed the market on a risk-adjusted basis, while the Sharpe ratio of 0.38 reflects the fund’s ability to generate returns relative to its risk. The standard deviation of 5.67% and a max drawdown of -12.3% highlight the potential for fluctuations in the fund’s value. These metrics are crucial for investors to consider, especially those with a lower risk tolerance, as they indicate the fund’s sensitivity to market movements.
Competitive Expense Ratio Analysis
While FSGRX’s expense ratio of 1.08% is higher than some of its peers, it is important to consider the fund’s performance in relation to its costs. The fund’s ability to deliver a 45.07% return over the past year suggests that the higher expense ratio may be justified by its superior performance. When compared to similar funds like Invesco Discovery-A (OPOCX) and Allspring Emerging Growth-A (WEMAX), which have lower expense ratios, FSGRX’s returns remain competitive. Investors should weigh the cost of investing in FSGRX against its potential for high returns and its track record of outperforming the benchmark.
Sector and Market Cap Allocation
FSGRX’s sector allocation is heavily weighted towards technology and healthcare, sectors that are often at the forefront of innovation and growth. This strategic allocation is complemented by a focus on small-cap companies, with 59.80% of the fund’s assets invested in small-cap stocks. This focus on smaller companies allows the fund to tap into emerging growth opportunities that larger funds might overlook. The fund’s market cap allocation also includes a 13.66% investment in medium-cap stocks, providing a balance between growth potential and stability. This diversified approach helps mitigate risks while maximizing growth opportunities.
Comparison with Similar Funds
When compared to similar funds such as Invesco SmallCap Growth-A (GTSAX) and Segall Bryant & Hamill SmallCap Gr-Ret (WTSGX), FSGRX stands out with its strong 1-year return of 45.07%. Although its expense ratio is slightly higher, the fund’s performance justifies the cost for many investors. The fund’s beta of 1.37 is comparable to its peers, indicating similar levels of volatility. However, FSGRX’s alpha of 7.41% suggests it has been more successful in generating excess returns. Investors should consider these factors when evaluating FSGRX against other small-cap growth options.
Conclusion: Is FSGRX Right for You?
Franklin SmallCap Growth-A (FSGRX) is an excellent choice for investors seeking high growth potential through small-cap U.S. stocks. Its impressive 1-year return of 45.07% and strategic sector allocation make it a compelling option for those willing to accept higher volatility for the chance of superior returns. However, the fund’s higher expense ratio and lack of yield may not suit income-focused investors. Overall, FSGRX is best suited for growth-oriented investors with a higher risk tolerance who are looking to capitalize on the dynamic opportunities within the small-cap market.
Similar Securities
TRSSX: TRPrice Inst SmallCap Stock-Inst | High Growth Small-Cap Fund
TRSSX offers high growth potential with a focus on small-cap stocks, boasting a 36.72% 1-year return, ideal for aggressive investors seeking capital growth.
PNSAX: Putnam SmallCap Growth-A | High Growth Potential in Small-Cap Stocks
PNSAX offers high growth potential with a 50.52% 1-year return, focusing on U.S. small-cap stocks. Its 1.21% expense ratio is competitive for its category.
JANVX: Janus Henderson Venture-D | Small Cap Growth Fund Analysis
JANVX offers strong small-cap growth with a 41.42% 1-year return, outperforming its benchmark. Ideal for aggressive investors seeking capital appreciation.
PSGIX: BlackRock Advantage SmallCap Growth-Inst | High Growth Potential in Small-Cap Equities
PSGIX offers high growth potential with a 43.12% 1-year return, focusing on small-cap U.S. equities with a competitive 0.5% expense ratio.
OTCFX: TRPrice SmallCap Stock-Inv | Small Cap Growth Opportunities
OTCFX offers small-cap growth with a 0.90% expense ratio, outperforming peers with a 36.72% 1-year return. Ideal for aggressive growth investors.
Futher Reading
https://finance.yahoo.com/quote/FSGRX/”>Yahoo: Franklin SmallCap Growth-A
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