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Franklin LifeSmart 2040 Retirement Target Fund

Fund Category: Asset AllocationGo to Prices & Performance page
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Symbol
CUSIP 354 72P 240
Fund Number 049
Inception Date1 Jul 01, 2013
Distributions Quarterly
Total Net Assets
(all share classes)
As of 03/31/2014
$1.0
(millions)

As of  04/24/2014

NAV2 $11.23  
NAV Change -$0.01  
POP3 $11.92  
YTD Total Return at NAV 0.45%
Distribution Rate at NAV
30-day Standardized Yield

Average Annual Total Returns
As of Quarter End 03/31/2014

w/ Sales Charge w/o Sales Charge
1 Yr
5 Yrs
10 Yrs
Life 7.76% 14.33%

Expense Ratio and Sales Charge As of 07/01/2013 (updated annually)

Gross Expense Ratio4,5 2.95%
Net Expense Ratio 0.95%
Max Initial Sales Charge 5.75%
CDSC 0.00%
12b-1 Fee 0.30%

Fund Description

Strategy Statement
Portfolio Managers
T. Anthony Coffey
"Designed for investors who anticipate retiring on or around 2040, the fund provides asset allocation which adjusts to become progressively more conservative as the target date approaches."

T. Anthony Coffey, CFA®
Joined Franklin Templeton in 1989
Managed Fund since 2013

Strategy, Benefits

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.

Glide Path

Glide Path

On January 1, 2014, the funds’ glide path was modified, including increasing its tactical allocation ranges and adding a strategic allocation to alternative funds.

The fund may allocate between 0-10% to alternative funds. It is anticipated that pro-rata adjustments will be made to the LifeSmart fund’s equity and fixed income investment allocations to facilitate investments to alternative funds in amounts greater than or less than the target allocation of 5%.

 

The chart is for illustrative purposes only; actual allocations and results may differ, depending on numerous factors.

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

Results

Hypothetical $10K Investment

Hypothetical $10K Investment

Investing in the Fund

What Are the Risks?
  • The investment risk of the retirement target fund changes over time as its asset allocation changes.
  • Since the fund invests in underlying funds, which may engage in a variety of investment strategies involving certain risks, the Franklin LifeSmart 2040 Retirement Target Fund is subject to those same risks.
  • All investments involve risks, including possible loss of principal. Principal invested is not guaranteed at any time, including at or after the fund’s retirement target date; nor is there any guarantee that the fund will provide sufficient income at or through the investor’s retirement.
  • Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions.
  • 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.
  • Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks which are heightened in developing countries.
  • These risks are described more fully in the fund’s prospectus.
  • Investors should consult their financial advisor for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives, retirement time horizons and risk tolerance.

Minimum Investment

$1,000.00

How Financial Advisors Help You

Speak to your financial advisor about whether this fund is appropriate for you. If you don't have a financial advisor, request a referral.

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Important Legal Information

Footnotes

For U.S. residents only.