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Franklin Real Return Fund

Fund Category: Fixed IncomeGo to Prices & Performance page
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Symbol FRRAX
CUSIP 353 612 724
Fund Number 423
Inception Date1 Nov 17, 2004
Distributions Monthly
Total Net Assets
(all share classes)
As of 03/31/2014
$402.7
(millions)

As of  04/17/2014

NAV2 $10.87  
NAV Change $0.01  
POP3 $11.35  
YTD Total Return at NAV 1.92%
Distribution Rate at NAV 1.62%
30-day Standardized Yield4,5
As of 03/31/2014 (updated monthly)
1.44%

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

w/ Sales Charge w/o Sales Charge
1 Yr -3.73% 0.58%
5 Yrs 3.19% 4.08%
10 Yrs
Life 3.57% 4.04%

Expense Ratio and Sales Charge As of 03/01/2014 (updated annually)

Gross Expense Ratio6,7 1.10%
Net Expense Ratio 0.92%
Max Initial Sales Charge 4.25%
CDSC 0.00%
12b-1 Fee 0.25%

Fund Description

Strategy Statement
Portfolio Managers
Anthony Coffey
"By focusing on inflation-protected securities and other investments correlated to inflation, we strive to maximize real return potential for shareholders."

T. Anthony Coffey, CFA®
Joined Franklin Templeton in 1989
Managed Fund since 2004

Strategy, Benefits, Results

Strategy

  • We generally invest a substantial portion of the fund's assets in inflation-protected securities, including Treasury Inflation-Protected Securities (TIPS). i
  • We may also invest in other asset classes that have historically shown a high correlation to inflation, such as foreign debt securities, real estate investment trusts (REITs), gold and other natural resource stocks.
i. Since TIPS make inflation adjustments, the NAV of a mutual fund that invests substantially in TIPS can decline in deflationary periods. Because the fund is heavily invested in TIPS, its dividend may also fluctuate dramatically from month to month, as negative inflation adjustments for TIPS in certain months may cause the fund to not earn enough net (after fees) investment income from its investments to pay out a dividend.

Benefits

  • Real Return Potential. The fund aims to achieve a total return that exceeds the rate of inflation over an economic cycle. i, ii
  • Hedge Against Deflation. At maturity, TIPS can be redeemed at their inflation-adjusted principal amount or at par value, whichever is greater. In a deflationary environment, that means a TIPS investor is guaranteed par value. iii
  • Diversification. The fund may be an effective diversifier in either a stock and/or traditional bond portfolio due to exposure to alternative asset classes.

i. Since TIPS make inflation adjustments, the NAV of a mutual fund that invests substantially in TIPS can decline in deflationary periods.   Because the fund is heavily invested in TIPS, its dividend may also fluctuate dramatically from month to month, as negative inflation adjustments for TIPS in certain months may cause the fund to not earn enough net (after fees) investment income from its investments to pay out a dividend.

ii. Fund investors who do not reinvest income that comes from inflation adjustments may not maintain the purchasing power of the investment over the long term. Income earned depends on the amount of principal invested, and that principal may not keep up with inflation if the investor does not reinvest the principal adjustment paid out as part of the fund's income.

iii. Some individual securities owned by the fund, but not shares of the fund, are guaranteed by the U.S. government as to timely payment of principal and interest. The fund's yield and share price are not guaranteed and will vary with market conditions.

Results

Hypothetical $10K Investment

Hypothetical $10K Investment

Investing in the Fund

What Are the Risks?
  • All investments involve risks, including possible loss of principal.
  • Interest rate movements will affect the fund’s share price and yield.
  • 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.
  • The risks of foreign securities include currency fluctuations and political uncertainty.
  • 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.
  • The fund is actively managed but there is no guarantee that the manager's investment decisions will produce the desired results.
  • These and other risks are described in the fund’s prospectus.

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.