Franklin Rising Dividends AFRDPX

Morningstar Rating

Fund Research and Analysis

by Greg Brown

Franklin Rising Dividends may be out of step with its peers at times, but it's still solid.

This fund has struggled to keep up with rivals during the recent market rebound. The powerful market rally that began in early March 2009 has given the typical large-blend fund a year-to-date return of nearly 20% through Sept. Read more

Kudos

Management follows a consistent stock-picking approach.

Lower dividend taxes could encourage many of this fund's holdings to increase their dividend payouts, which could help the offering's total returns.

Experienced management. Read more

Risks

Concentration in certain sectors and names can lead the fund into rough spots.

If more companies decide to start paying dividends in response to lower taxes, that won't immediately increase this fund's universe, because the fund requires stocks to have a 10-year dividend history.

Tends to lag in growth rallies. Read more

Strategy

The fund buys companies that have increased their dividends in eight of the last 10 years and doubled their total payouts over the same period (with no decreases). It prefers businesses that distribute less than 65% of their earnings, so they still have money left to invest in their operations. Read more

Management

Don Taylor leads a team that includes Bill Lippman and Margaret McGee. Taylor has worked on the fund since 1996. Prior to that he worked for Fidelity Investments. Lippman has been with the offering since its inception and devised the strategy. McGee has been with the firm and fund since 1988. Read more

Inside Scoop

This fund's focus on value-priced firms with steadily rising dividends and low debt levels has given it a sturdy long-term risk/reward profile. Read more

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