Franklin International Growth Fund overview
The Franklin International Growth Fund notes that it invests “in the equity securities of mid-and large capitalization companies outside the U.S. with long-term growth potential.”
When the fund’s management refers to mid- and large-cap companies, it means companies with market caps above $2 billion. The fund can invest up to one-fifth of its assets in emerging market countries.
The fund’s 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.”
The fund’s assets were spread across 40 holdings in March 2016, and the fund was managing $420.9 million in assets. In March, its equity holdings included Alkermes (ALKS), Amec Foster Wheeler (AMFW), ARM Holdings (ARMH), Burberry Group (BURBY), and Check Point Software Technologies (CHKP).
Portfolio changes in the Franklin International Growth Fund
Industrials is the top choice for the FNGAX as far as sector allocation goes. Closely following are the consumer discretionary and healthcare sectors. Each of these sectors commands more than one-fifth of the portfolio. Together, they form 62% of the fund’s assets.
The fund is not invested in the telecom services and utilities sectors. Because the portfolio is quite concentrated, its top ten holdings form close to one-third of the total assets.
In terms of country exposure, stocks from the United Kingdom dominate the portfolio, forming 32% of the total assets. Canada, Australia, and Japan are the only three countries among the top 10 that are outside of Europe.
In the past 12 months until May 2016, FNGAX has witnessed increased exposure to discretionary and healthcare stocks. The fund’s exposure to financials, energy, and materials has been reduced. In particular, materials have seen a sharp reduction in weight.
How has the Franklin International Growth Fund – Class A (FNGAX) fared in YTD 2016? Let’s look at that in the next article.