Franklin LifeSmart 2055 Retirement Target Fund

Fund Description

The fund's investment goal is to seek the highest level of long-term total return consistent with its asset allocation. Total return consists of both capital appreciation and income with the portfolio gradually placing an increasing emphasis on income as the year 2055 approaches.

Along with an expectation to retire in or near the year 2055, the fund is designed for investors that want:

  • the simplicity of an asset allocation fund paired with a risk management approach.
  • active and flexible portfolio management.
  • a specialized multi-asset strategy team managing complex investment decisions.

Strategy Statement

"Designed for investors who anticipate retiring on or around 2055, the fund provides asset allocation which adjusts to become progressively more conservative as the target date approaches."

Management

Thomas Nelson, CFA

Thomas Nelson, CFA®

  • Joined Franklin Templeton in 2007
  • Managed Fund Since 2015
T. Anthony Coffey, CFA

T. Anthony Coffey, CFA®

  • Joined Franklin Templeton in 1989
  • Managed Fund Since 2015

Strategy, Benefits, Results

Strategy

The fund seeks the highest level of long-term total return consistent with its asset allocation. The portfolio manager:

  • Allocates primarily to a combination of Franklin Templeton equity, fixed income and alternative funds, based on each underlying fund’s predominant asset class.
  • When selecting equity funds, considers U.S. and foreign investment exposure, market capitalization ranges and investment style (growth vs. value) along with other factors.
  • When choosing fixed income funds, focuses on maximizing current income, appropriate to the retirement target fund’s risk profile.
  • Considers risk management factors, such as the underlying funds’ relative and absolute performance, as well as their volatility of returns over time.

Asset Allocation Approach (Glide Path)

  • Strategic: The fund will have a larger allocation to equities in earlier years, seeking greater growth opportunities. With the asset allocation strategy becoming increasingly conservative, the fund is at its most conservative allocation at the “landing point” (reached at target date); thereafter, this strategic asset allocation will generally become fixed.
  • Tactical: The portfolio manager may implement a tactical allocation adjustment of each asset class within a range of +/- 10% of the fund’s assets while varying the underlying funds (and their respective allocation amounts). The manager also has the flexibility to adjust the glide path, including modifying the targeted asset allocation percentages from time to time.

Benefits

Balances investment total return goals with a risk-focused approach

  • Asset allocation strategy becomes increasingly more conservative as the retirement target date nears
  • Actively managed retirement target fund
  • Broad spectrum of time-tested investment strategies
  • Specialized multi-asset strategy team

Diversified selection of investments

There are well over 100 investment vehicles, which fall within the various asset classes, that are available to the LifeSmart portfolio manager. Asset classes such as:

International
U.S. Growth U.S. Value
Fixed Income
Sector Alternatives

Selling The Fund

  1. Highlight the shifting allocation of the fund to a more conservative investment mix (shift towards fixed income investments) as the stated retirement target date of the fund approaches. It’s important to note that the principal value of the fund will fluctuate and is not guaranteed at any time, including at the stated retirement target date for the fund.

  2. Emphasize the fund’s broad diversification across asset classes as well as investment styles, sectors and regions.

  3. Point out how the fund’s structure offers a convenient way to get an asset-allocated portfolio from one investment vehicle.

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