Fund Description

The fund seeks capital appreciation by investing predominantly in equity securities of companies demonstrating accelerating growth, increasing profitability, or above average growth or growth potential as compared with the overall economy.

Strategy Statement

"We seek to invest in high quality, leading growth companies in the United States to create a diversified, multi-cap, multi-industry fund."

Grant Bowers

Management

Grant Bowers

Grant Bowers

  • Joined Franklin Templeton in 1993
  • Managed Fund Since 2007
Sara Araghi, CFA

Sara Araghi, CFA®

  • Joined Franklin Templeton in 2003
  • Managed Fund Since 2016

INVESTMENT PHILOSOPHY, STRATEGY AND APPROACH

Investment Philosophy

The Franklin Equity Group philosophy holds that companies with the potential for long-term sustainable growth can provide significant opportunities for investors. Market participants can have a short-term perspective and may under appreciate the potential for value created by sustainable growth. We believe that we have the potential to deliver superior risk-adjusted returns by identifying companies with potential for sustainable growth which we believe is not reflected in current prices.

Investment Process

Within a collaborative environment, our team utilizes fundamental, bottom-up research to focus on companies that we believe have sustainable growth characteristics—meeting our criteria of Growth, Quality and Valuation.

Our analysis includes an assessment of any material Environmental, Social and Governance (ESG) factors on the long-term risk and return profile of a company.

Growth

  • Focus on companies with potential to produce sustainable earnings and cash flow growth
  • Evaluate the long-term market opportunity and competitive structure of the industry seeking to identify target leaders and emerging leaders

Quality

  • Seek companies with strong and improving competitive positions in attractive markets
  • Identify experienced and talented management teams as well as financial strength reflected in the capital structure, gross and operating margins, free cash flow generation, and returns on capital

Valuation

  • Consider a range of potential outcomes based on an assessment of multiple scenarios
  • Evaluate whether, in our view, security prices fully reflect the balance of the sustainable growth opportunities relative to the business and financial risks

Rating

Overall Morningstar Rating As of 10/31/2019

Rating Category: Large Growth

Morningstar
The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Historical Morningstar Rating As of 10/31/2019

Years Ratings Funds
in category
3
3 Stars
1232
5
3 Stars
1095
10
2 Stars
813

Morningstar Style Box As of09/30/2019

Strategy, Benefits, Results

Strategy

We use fundamental, bottom-up research to find innovative, fast-growing companies that meet our criteria of:

  • Growth. We focus on companies with the potential to produce sustainable earnings and cash-flow growth.
  • Quality. We seek high-quality companies with strong management teams and financial strength.
  • Valuation. We assess whether the growth opportunity is already reflected in the stock price.

Benefits

  • Tenured and experienced portfolio management team.
  • Distinct research structure. Investment professionals organized into collaborative sector teams.
  • Multi-cap strategy leads to a broadly diversified portfolio of fast-growing businesses.

Selling The Fund

  1. Emphasize that the fund has an experienced management team that uses a collaborative research-driven approach.

  2. Highlight the multi-cap strategy and broad diversification of the fund.

  3. Discuss the fund’s focus on companies that exhibit innovation and accelerating growth.