What's In a Name?
This story appears in the December 2005 issue of Entrepreneur. Subscribe »
Sometimes a fund's name doesn't tell the entire story. Take the Franklin Income Fund (FKINX), for instance. At first blush, you might think this is purely a bond fund-but you'd be wrong.
Around since 1948, this five-star Morningstar-rated fund has an average annual total return of 10 percent over the past five years. It has racked up impressive returns by investing in various dividend-paying stocks and income-producing bonds. As of July 30, some 53 percent of the fund's assets were invested in stocks and 39 percent in bonds.
Ed Perks, one of the fund's two managers, says interested investors might not understand the fund's versatility. "The fund's name certainly draws people's attention to a fixed-income investment," he says. "But what really sets this fund apart is the flexibility we have to pursue attractive current income and position the fund to maintain potential for capital appreciation over the long term."
The Franklin Income Fund is best for investors looking for diversification across stocks and bonds and who seek high current income. "In terms of risks," says Perks, "we are investing in equity and fixed-income, predominately corporate fixed-income." So overall risks to investors include economic condition risks, corporate credit risks and interest rate risks.
