United States
One of the most attractive aspects of retirement is the freedom to live life on your own terms. For many, this starts with figuring out how to generate income once the paychecks from work stop. Here’s a strategy to consider. Use an investment's income distributions to help with monthly living expenses while reinvesting any capital gains.
For more than 70 years, spanning multiple market cycles, Franklin Income Fund--Advisor Class (FRIAX) has paid uninterrupted dividends.1 Here's how the strategy would've worked for someone retiring about 20 years ago on December 31, 2000:2
For a retire
making
initial investment
Generated an
average income
of
$2,660
After 20 years
Ending December 30, 2020
Total income distributions paid
$638,409
+
Ending accountbalance of
$517,639
Click the envelopes below to see the income generated each month by this scenario.
THE ENVELOPE, PLEASE...
Income Distributions of a $500,000 Investment in Franklin Income Fund─Advisor Class
20-Year Period Ended December 31, 2020
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sept | Oct | Nov | Dec | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2001 | |
|
|
|
|
|
|
|
|
|
|
|
| 2002 | |
|
|
|
|
|
|
|
|
|
|
|
| 2003 | |
|
|
|
|
|
|
|
|
|
|
|
| 2004 | |
|
|
|
|
|
|
|
|
|
|
|
| 2005 | |
|
|
|
|
|
|
|
|
|
|
|
| 2006 | |
|
|
|
|
|
|
|
|
|
|
|
| 2007 | |
|
|
|
|
|
|
|
|
|
|
|
| 2008 | |
|
|
|
|
|
|
|
|
|
|
|
| 2009 | |
|
|
|
|
|
|
|
|
|
|
|
| 2010 | |
|
|
|
|
|
|
|
|
|
|
|
| 2011 | |
|
|
|
|
|
|
|
|
|
|
|
| 2012 | |
|
|
|
|
|
|
|
|
|
|
|
| 2013 | |
|
|
|
|
|
|
|
|
|
|
|
| 2014 | |
|
|
|
|
|
|
|
|
|
|
|
| 2015 | |
|
|
|
|
|
|
|
|
|
|
|
| 2016 | |
|
|
|
|
|
|
|
|
|
|
|
| 2017 | |
|
|
|
|
|
|
|
|
|
|
|
| 2018 | |
|
|
|
|
|
|
|
|
|
|
|
| 2019 | |
|
|
|
|
|
|
|
|
|
|
|
| 2020 | |
|
|
|
|
|
|
|
|
|
|
|
Dividends will vary depending on the fund's income, and past distributions are not indicative of future trends.
Performance data represents past performance, which does not guarantee future results. Current performance may differ from the figures shown. A fund’s investment return and principal value will change with market conditions, and investors may have a gain or a loss when they sell their shares. Please view Franklin Income Fund’s most recent month-end performance.
The hypothetical scenario does not take into account federal, state or municipal taxes. If taxes were taken into account, the hypothetical values shown would have been lower.
Franklin Income Fund
Franklin Income Fund seeks to maximize income, while maintaining prospects for capital appreciation over the long term by:
Seeking undervalued securities unconstrained by asset classes or market cycles
Pursuing income across the capital structure of a company using stocks, convertible securities and bonds
Adjusting fund allocations without set proportions based on current market opportunities
With over 70 years of uninterrupted dividends, Franklin Income Fund provides investors seeking income a time-tested strategy that has delivered strong results over multiple market cycles.”
Edward D. Perks
Portfolio Manager, Franklin Income Fund
Average Annual Total Returns (For Periods Ended June 30, 2021)
| 1-year | 3-year | 5-year | 10-year | Since Inception (8/31/48) | |
|---|---|---|---|---|---|
| Advisor Class (FRIAX)1 | 28.26% | 8.45% | 8.52% | 6.98% | 10.11% |
| Class A (FKIQX)3 | |||||
| Without Sales Charge | 28.33% | 8.16% | 8.26% | 6.74% | 10.02% |
| With 3.75% Initial Sales Charge | 23.52% | 6.79% | 7.43% | 6.33% | 9.96% |
| Total Annual Operating Expenses | |
|---|---|
| Advisor Class | 0.47% |
| Class A | 0.72% |
| 30-Day Standardized Yield As of JUNE 30 | |
|---|---|
| Advisor Class | 2.46% |
| Class A | 2.12% |
Performance data represents past performance, which does not guarantee future results. Current performance may differ from the figures shown. A fund’s investment return and principal value will change with market conditions, and investors may have a gain or a loss when they sell their shares. Please view Franklin Income Fund’s most recent month-end performance.
Advisor Class shares do not have sales charges or Rule 12b‐1 fees and are offered only to certain eligible investors as stated in the prospectus. The fund offers other share classes, subject to different fees and expenses that will affect their performance. Please see the fund’s prospectus for more information about fees and expenses.
- Effective 12/31/96, the fund began offering Advisor Class shares. For periods prior to the fund's Advisor Class inception date, a restated figure is used based on the fund's oldest share class, Class A1 performance, excluding the effect of Class A1's maximum initial sales charge but reflecting the effect of the Class A1 Rule 12b-1 fees; and for periods after the fund's Advisor Class inception date, actual Advisor Class performance is used, reflecting all charges and fees applicable to that class.
- Source: Morningstar via Advanced HypotheticalTM Tool. Assumes initial $500,000 investment without sales charges, all income distributions paid out, and reinvestment of all capital gains. If sales charges had been included, the results would have been lower.
- Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%; thus actual returns would have differed. Total returns with sales charges have been restated to reflect the current maximum initial sales charge of 3.75%. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the fund's Class A1 performance and including any Rule 12b-1 rate differential as exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A performance is used, reflecting all charges and fees applicable to that class. Effective 5/1/94, the fund implemented a Rule 12b-1 plan, which affects subsequent performance. Class C: Prior to 1/1/04, these shares were offered with an initial sales charge; thus actual returns would have differed.
- The fund's 30-Day Standardized Yield is calculated using the net income (interest and dividends) per share earned over a trailing 30-day period (annualized), divided by the fund's share price at the end of that period. It may not equal the fund’s actual income distribution rate, which reflects the fund’s past dividends paid to shareholders.
Additional Resources
Featured Fund
What Are the Risks?
All investments involve risks, including possible loss of principal. The fund's portfolio includes a substantial portion of higher-yielding, lower-rated corporate bonds and some floating rate loans, which are also higher-yielding and lower-rated. These investments have more credit risk than investment-grade securities and are subject to increased risk of default and potential loss of principal. The fund's share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund's share price may decline. Changes in the financial strength of a bond issuer or in a bond's credit rating may affect its value. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Foreign investing involves additional risks such as currency and market volatility, as well as political and social instability. These and other risk considerations are discussed in the fund's prospectus.
Important Legal Information
For Financial Professional Use Only
This communication is general in nature and provided for educational and informational purposes only. It should not be considered or relied upon as legal, tax or investment advice or an investment recommendation, or as a substitute for legal or tax counsel. Any investment products or services named herein are for illustrative purposes only, and should not be considered an offer to buy or sell, or an investment recommendation for, any specific security, strategy or investment product or service. As a financial professional, only you can provide your customers with personalized advice and investment recommendations tailored to their specific goals, individual situation, and risk tolerance.
Franklin Templeton (FT) does not provide legal or tax advice. Federal and state laws and regulations are complex and subject to change, which can materially impact results. Franklin Templeton (FT) cannot guarantee that such information is accurate, complete or timely; and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.
Your clients should carefully consider a fund's investment goals, risks, charges and expenses before investing. Download a prospectus, which contains this and other information. Your clients should read the prospectus carefully, before they invest or send money.
You need Adobe Acrobat Reader to view and print PDF documents. Download a free version from Adobe's website.
Franklin Distributors, LLC. Member FINRA/SIPC. Prior to July 7, 2021, Franklin Templeton Distributors, Inc., and Legg Mason Investor Services, LLC served as mutual fund distributors for Franklin Templeton.
