Any investors hoping to find a Muni – Bonds fund could think about starting with Franklin California Tax-Free Income A (FKTFX). FKTFX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
FKTFX is one of many Muni – Bonds funds to choose from. Muni – Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as ” general obligation ” and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
Franklin is responsible for FKTFX, and the company is based out of San Mateo, CA. The Franklin California Tax-Free Income A made its debut in February of 1977 and FKTFX has managed to accumulate roughly $6.50 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 0.29%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.35%, which places it in the middle third during this time-frame.
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It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, FKTFX’s standard deviation comes in at 8.01%, compared to the category average of 12.69%. Over the past 5 years, the standard deviation of the fund is 7.04% compared to the category average of 12.26%. This makes the fund less volatile than its peers over the past half-decade.
Modified duration is a measure of a given bond’s interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
If you believe interest rates will rise, this is an important factor to look at. FKTFX has a modified duration of 7.9, which suggests that the fund will decline 7.9% for every hundred-basis-point increase in interest rates.
