Why is the Franklin Income Fund Dropping?
aryder
find any news on the fund. I would apprciate any insights on this.
Thanks!
uncle_vito
when the stock drops. Also it is the end of the month and that is when
dividends are usually paid. I suspect that is what happened.
I great fund, I might add.
Vito
"Blash" <bla...@comcast.net> wrote in message
news:C2D3B6A8.74A8C%bla...@comcast.net...
> aryder wrote on 7/30/07 3:00 PM:
>
>> Would anyone know? It's symbol FCISX, and it's the type C one. I can't
>> find any news on the fund. I would apprciate any insights on this.
>> Thanks!
>>
>
> Do you have any idea of what a mutual fund is???
> Did you read their prospectus: "may invest up to 100% of total assets in
> debt securities that are rated below investment-grade"???
> Have you ever heard of the sub-prime loan problems???
>
704set
stock.
Now that we have that out of the way, the fund does not pay a dividend, it
pays a distribution. The distribution is not paid when the fund drops, but
the fund drops because a distribution is paid.
704set
"uncle_vito" <uncle_v...@yahoo.com> wrote in message
news:13asmg0...@corp.supernews.com...
catalpa
"aryder" <alan...@aol.com> wrote in message
news:1185822022.4...@r34g2000hsd.googlegroups.com...
> Would anyone know? It's symbol FCISX, and it's the type C one. I can't
> find any news on the fund. I would apprciate any insights on this.
> Thanks!
>
It is a junk bond fund and the news about junk bonds is everywhere. You
shouldn't invest money in things that you don't understand and can't bother
to research.
catalpa
>when the stock drops. Also it is the end of the month and that is when
>dividends are usually paid. I suspect that is what happened.
>
> I great fund, I might add.
>
> Vito
>
Another Franklin fund that holds junk bonds. The NAV has dropped from 2.82
to 2.65 in 2 months, with the 6% decline wiping out the annual yield of
5.18%. Doesn't look so great to me.
uncle_vito
fluctuations That is why dividend paying stocks/funds can be popular. They
continue to pay even though the market may be down.
It is a great fund.
BTW this subprime stuff is just the 'worry of the day'. It will be
forgotten in 6 months.
Vito
"catalpa" <cat...@entertab.org> wrote in message
news:fYxri.7632$8u1.6574@trnddc07...
uncle_vito
domestic bonds, 33% large cap stocks and 9% international stocks. 6%
'other'.
Hardly a junk bond fund. I have had it for 3 years and it has done great.
Much of the income is from dividend stocks.
Next time you post, do not show your ignorance.
Vito
"catalpa" <cat...@entertab.org> wrote in message
news:hQxri.7630$8u1.6726@trnddc07...
Steve Pope
fund can sweat out a short term decline (okay, a rout in this case),
whereas an open-end fund like the Franklin under discussion has to
dump its holdings as investors sell (thus adding to the carnage).
Fact is, corporate bond spreads have been lower than normal for
several years. Widening spreads do not mean the credit quality
is suddenly worse.
Steve
catalpa
> My prospectus says that it is a conservative allocation income fund. 52%
> domestic bonds, 33% large cap stocks and 9% international stocks. 6%
> 'other'.
>
> Hardly a junk bond fund. I have had it for 3 years and it has done great.
> Much of the income is from dividend stocks.
>
> Next time you post, do not show your ignorance.
>
> Vito
>
Maybe you should read the complete prospectus, especially the part about
investing in junk bonds. Go to the Franklin Funds website and look at the
portfolio holdings for the Franklin Income Fund. Portfolio mix is 48%
stocks, 46% bonds and 6 % cash. For the bonds the credit quality is stated
as:
Credit Quality Summary (as of June 30, 2007)
Investment Grade: 11.4%
Below Investment Grade: 85.4%
Not Rated: 3.2%
That is 88.6% junk bonds, making it a junk bond fund. 17.2% is rated CCC and
0.7% is rated D (defaulted), that's the dregs of the bond market - total
garbage.
If that is a "Conservative Allocation" income fund I would hate to see what
they consider an "Aggressive Allocation" income fund.
rick++
Any fund with lots of bond holdings is tanking this year.
Alan Bowler
> Fact is, corporate bond spreads have been lower than normal for
> several years. Widening spreads do not mean the credit quality
> is suddenly worse.
But it does generally mean that people have realized
that credit quality is worse than they thought it was.
It was already poor, but interest was being charged
as if it was better quality. Holders of those bonds
had overpaid and are only now realizing that they did so.
Steve Pope
>Steve Pope wrote:
>> Fact is, corporate bond spreads have been lower than normal for
>> several years. Widening spreads do not mean the credit quality
>> is suddenly worse.
>But it does generally mean that people have realized
>that credit quality is worse than they thought it was.
>It was already poor, but interest was being charged
>as if it was better quality.
I agree with that. Especially true for investment grade
corporation bonds which have had truly miniscule spreads.
>Holders of those bonds
>had overpaid and are only now realizing that they did so.
In some cases, not all. Your results depend upon your strategy
for when you move into bonds. Spreads are one component of bond
price but the other is the base rate. Treasury yields have
sunk 0.3% in the past two weeks.
Many closed-end junk bond funds have had 10% - 15% annualized
yield in the past three years even after the recent rout.
They benefit from active management.
Steve
bob wald
i'm not connected with the company. just telling about a lil know fund.
uncle_vito
average BB.
http://finance.yahoo.com/q/hl?s=FKINX
These are not junk. And they are conservative and they only make up about
half of the holdings. Others are dividend stocks (not found in a junk stock
fund). And the fund only pays 5.78% income which is too low for junk bonds.
Also the fund has not dropped any more than any other combination bond/stock
fund.
Vito
"catalpa" <cat...@entertab.org> wrote in message
news:dsHri.7321$yg1.1763@trnddc04...
bob wald
laughing....lol
that against my balanced transamerica premier fund i'm in.....lol
glad i just look here for laughssss...
Steve Pope
> Maybe we are talking about different funds.
> In the Yahoo website, the bonds average BB.
> http://finance.yahoo.com/q/hl?s=FKINX
> These are not junk.
Yes the are, junk goes up to BB+ and investment grade starts
at BBB-.
Tangentially, I'm not particularly fond of mixed bond/stock funds.
Seems like you'd have to pay twice as many investment advisers,
either that or you will lack expertise.
Steve
uncle_vito
question posted to the group.
If truth be known, I have $91k in FKINX, and $100K in a California tax free
fund earning 4.8% and $85K in a Mortgage backed bond (NOT fund) paying 8.5%
annually. Since this is an individual bond, any drop due to subprime will
not be seen at maturity.
This is 20% of my portfolio. The rest is stock and stock funds.
I hope this meets with you guys' stern approval. And BOB, sorry if it is
not as good at your Transamerica Premier fund.
Sheesh....Vito
"Steve Pope" <spo...@speedymail.org> wrote in message
news:f8oais$5v4$1...@blue.rahul.net...
Steve Pope
>Dang, you 'bond' guys are heartless. I was just trying to answer aryder's
>question posted to the group.
>
>If truth be known, I have $91k in FKINX, and $100K in a California tax free
>fund earning 4.8% and $85K in a Mortgage backed bond (NOT fund) paying 8.5%
>annually. Since this is an individual bond, any drop due to subprime will
>not be seen at maturity.
>
>This is 20% of my portfolio. The rest is stock and stock funds.
>
>I hope this meets with you guys' stern approval. And BOB, sorry if it is
>not as good at your Transamerica Premier fund.
Not a problem, sound's like you've got a good mix there.
Just wanted to point out the technicality that BB is where junk
starts. And you're right that FKINX is not properly called a junk
bond fund (of own I have a couple).
Steve