Franklin Income AFKINX

Morningstar Rating

Fund Research and Analysis

by John Coumarianos

Trim if you must, but don't sell Franklin Income.

This conservative-allocation fund struggled mightily in 2008, when it dropped a whopping 30%, surprising many investors who've enjoyed its prodigious income and stability over the years. The fund has relied on corporate bonds--both investment grade (high quality) and high yield (low quality)--to generate income, and that strategy backfired in 2008. Read more

Kudos

Low expenses.

Above-average yield.

Impressive total returns.

Seasoned and skilled management. Read more

Risks

Significantly more volatile than most of its peers.

The stock portfolio is concentrated in just a handful of sectors, which courts sector risk.

The fund has considerable exposure to high-yield bonds at times, which increases credit risk. Read more

Strategy

This fund's management takes a value-oriented, contrarian approach to investing. It buys beaten-down blue chips, utilities stocks, and high-yield bonds in an effort to provide shareholders a fat yield and an attractive total return. Read more

Management

Charles Johnson and Ed Perks run this fund. Johnson is the chairman of Franklin, while Perks is a seasoned veteran--he's been at the firm for more than a decade. Read more

Inside Scoop

Yield comes first here. This fund's portfolio includes junk bonds, utilities stocks, and a host of other income-producing securities. Read more

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