There is no doubt that the Franklin Income Fund is among the top companies among all mutual fund companies. However, the continuous decline in oil prices starting from the month of June 2014 has affected the mutual fund company’s performance negatively.
At the end of the month of September 2014, the company’s $94 billion fund had about $2 billion in bets in terms of the junk-rated debt of certain small production and exploration firms, by which most of these have tanked as the futures of crude oil sunk to equivalent of four-year lows.
According to Morning Star, the three-month return of Franklin Income Fund is negative 3.93 percent. This definitely much worse compared to the average three-month return of its mutual fund peers of negative 0.74 percent. Contrary to this, Franklin Fund is known to beat a total of 96 percent of its mutual fund peers over the past decade with its 6.87 percent annualized total return.
Ed Perks, the portfolio’s manager, if he makes the perfect bets, refused to tell what he has been selling or buying since the month of September 2014. However, he revealed that he is screening firms whose bond price has plunged even when these companies’ debt maturities are already years out.