Is Franklin Gold & Precious Metals A (FKRCX) a good mutual fund choice right now?

JHere are plenty of choices in the Mutual Fund Stock Report category, but where to start your search? Well, one fund that might be worth investigating is Franklin Gold & Precious Metals A (FKRCX). FKRCX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine predictor factors such as size, cost, and past performance.

Fund/manager history

Franklin Templeton is responsible for FKRCX, and the company is based in San Mateo, California. Since Franklin Gold & Precious Metals A debuted in May 1969, FKRCX has accumulated over $835.99 million in assets. Steve Land is the current manager of the fund and has held this position since April 1999.

Performance

Of course, investors are looking for strong performance in funds. This fund has a 5-year annualized total return of 8.85% and ranks in the top third of its peers in the category. But if you’re looking for a shorter timeframe, it’s also worth looking at its 3-year annualized total return of 23.66%, which puts it in the top third over that timeframe.

When looking at a fund’s performance, it’s also important to note the standard deviation of returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of FKRCX over the past three years is 38.54% compared to the category average of 20.66%. Looking at the past 5 years, the standard deviation of the fund is 32.28% compared to the category average of 17.9%. This makes the fund more volatile than its peers over the past half-decade.

Risk factors

Investors should note that the fund has a beta of 1 over 5 years, meaning it is hypothetically as volatile as the market as a whole. Alpha is an additional metric to consider, as it represents the performance of a portfolio on a risk-adjusted basis relative to a benchmark, which in this case is the S&P 500. The fund has produced a negative alpha over the last 5 years of -0.61, which shows that the managers of this portfolio are struggling to select stocks that generate returns above the benchmark.

Expenses

Costs are increasingly important for investing in mutual funds, especially as competition intensifies in this market. And all other things being equal, a lower-cost product will outperform its otherwise identical counterpart, so it’s essential for investors to take a closer look at these metrics. In terms of fees, FKRCX is a load fund. It has an expense ratio of 0.89% compared to the category average of 1.34%. So, FKRCX is actually cheaper than its peers from a cost perspective.

Investors should be aware that with this product the minimum initial investment is $1,000; each subsequent investment has no minimum amount.

Conclusion

Overall, Franklin Gold & Precious Metals A (FKRCX) has a high ranking in the Zacks Mutual Fund, and in conjunction with its relatively strong performance, worse downside risk, and lower fees, this fund appears to be a good potential choice for investors right now.

For more information on the World Mutual Funds Mutual Funds Stock Report area, be sure to visit www.zacks.com/funds/mutual-funds. There you can learn more about the ranking process and dive even deeper into FKRCX for more information. Want to know more ? We have a full suite of stock tools that you can also use to find the best picks for your portfolio, no matter what type of investor you are.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Dolores W. Simon