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What You Should Know about the Franklin International Growth Fund

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Mar. 10 2016, Published 11:34 a.m. ET

Franklin International Growth Fund

The Franklin International Growth Fund invests “in the equity securities of mid- and large-capitalization companies outside the U.S. with long-term growth potential.” When fund management refers to mid- and large-cap companies, it means companies with market caps above $2 billion. The fund can invest up to a fifth of its assets in emerging market countries. The fund is managed by Don Huber, Coleen Barbeau, and M. Par Rostom.

Fund management undertakes the bottom-up approach to investment in order to find companies that have higher expected earnings and revenue growth than their peers. Managers look for companies that offer “the most attractive combination of growth, quality and valuation.”

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Portfolio composition

According to information provided by the fund house, industrials was the single-largest sectoral holding of the fund and formed 21.2% of the portfolio. Healthcare and consumer discretionary, in that order, were second and third, and formed a combined 39% of the portfolio. Compared to the MSCI EAFE Index, the fund was overweight in the industrials, healthcare, consumer discretionary, and information technology sectors while it was underweight in the financials, consumer staples, and energy sectors, among others. The fund isn’t invested in the telecom services and utilities sectors.

Stocks from the UK formed 31.6% of the fund’s assets for February, making the UK the geography with the highest weight. Germany followed, forming 9.9% of the portfolio. Denmark, Belgium, and Switzerland, in that order, rounded off the top five countries with the heaviest weights.

Alkermes (ALKS), Amec Foster Wheeler (AMFW), ARM Holdings (ARMH), Burberry Group (BURBY), and Check Point Software Technologies (CHKP) were among the fund’s 39 holdings as of the end of January. As of February 2016, the fund was managing assets worth $403.4 million.

Fees and minimums

The Franklin International Growth Fund – Class A (FNGAX) was incepted in June 2008 and has an expense ratio of 1.4%. There is a minimum requirement of $1,000 to invest in this fund via Class A shares. The fund can charge a maximum sales charge of 5.8% of the offering price on the purchase of Class A shares.

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