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Franklin US Opportunities Fund - News
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Fund Merged
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Wednesday, 2 December 2020
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Official Announcement
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Franklin US Equity Fund has closed and merged into Franklin US Opportunities Fund.
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Fund Merged
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Tuesday, 5 December 2017
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Official Announcement
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Franklin US Small-Mid Cap Growth Fund has closed and merged into Franklin US Opportunities Fund.
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Name Change
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Wednesday, 3 October 2007
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Official Announcement
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The fund name changed from Franklin Aggressive Growth to the Franklin US Opportunities Fund on the 31st of August 2007.
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Franklin Aggressive Growth comment - Jul 06
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Monday, 28 August 2006
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Fund Manager Comment
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In July, Franklin Aggressive Growth Fund underperformed its benchmark, producing a net return of -4.49% (in U.S. dollars) compared with -2.19% for the Russell 3000 Growth Index.
During the month, the largest positive contribution to relative returns came from health services, a sector in which the fund has an overweight position. A position in producer manufacturing also helped the fund. Additional positive contributions, while slight, came from energy minerals and transportation.
By contrast, highlighting another difficult period for the fund and the U.S. growth sector in general, 13 out of a possible 17 sectors produced negative returns in July, with the biggest drag on performance coming from technology services. Services to the health industry (a sub-sector of health services), proved the best-performing allocation during the period, while an overweight allocation to computer process hardware (a sub-sector of electronic technology) also helped the fund's relative returns.
While the technology services sector has been a significant contributor to the fund's year-to-date relative returns, several negative segments acted as a drag on performance in July. Packaged software, information technology and data processing services all produced negative returns, while an overweight allocation to internet software/services, which outperformed during the month, served to mitigate the sector's overall negative performance.
Outlook
Throughout the fund's existence, our philosophy has not changed. We look to invest in stocks that present the best trade-off between growth opportunity, business and financial risk, and valuation. We focus on innovative, rapidly growing companies in a variety of industries and across all market capitalization sizes. We search for companies with identifiable growth drivers, such as new product development, leverage to a change in the economy, or secular industry growth. We look for companies with strong balance sheets and with the ability to invest in future growth and gain market share. We also look for companies with strong operating leverage, or the ability to increase profit margins as sales grow.
We are cautiously optimistic about the prospects for the U.S. equity markets, and we continue to position the portfolio to benefit from continued growth in the domestic economy. In our view, the investment backdrop remains mostly favorable, although it has been impacted by geopolitical events, fears about global inflation, higher interest rates, and the sustainability of revenue and earnings growth. Inflation has increased but seems under control, interest rates are still relatively low, and inventory levels in most areas are healthy. We believe that these factors could continue to fuel economic growth, leading to continued growth in corporate profits. The managers have positioned the Fund accordingly.
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Franklin Aggressive Growth comment - Feb 06
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Monday, 28 August 2006
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Fund Manager Comment
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In February, Franklin Aggressive Growth Fund outperformed its benchmark, the Russell 3000 Growth Index, producing a net return of +0.48% (in U.S. dollars), compared with -0.19% for the benchmark.
The fund's relative outperformance during the month came from our ability to find growth stocks that had sustainable competitive advantages across sectors and market capitalization's. We continue to focus on fast-growing, innovative companies that have the potential for significant price appreciation.
During the month, the largest positive contribution to relative returns came from commercial services, a sector in which the fund has an overweight position and represents the third-largest weighting in the portfolio. The fund's second-largest positive contribution came from distribution services. Superior stock selection drove the fund's performance in this sector. Additional positive contributors to the fund's performance came from communications and consumer services, both of which outperformed.
By comparison, the biggest negative impact on performance came from the electronic technology sector. Exposure to the health technology and consumer non-durables sectors also hurt the fund.
Information technology services (a subsector of technology services) was the best-performing allocation during the period. Within producer manufacturing, an overweight allocation to trucks/construction/farm machinery, a subsector within producer manufacturing, helped the fund's relative returns. Within distribution services the fund was also helped by an overweight allocation to wholesale distributors, which outperformed.
While electronic production equipment and computer peripherals, both of which outperformed, helped the fund in February, several negative segments of the electronic technology sector acted as a drag on performance. Computer communications, electronic components, computer processing hardware and semiconductors all underperformed during the period.
On an individual stock level, notable positive contributions came form Cognizant Technology Solutions (technology services), Oshkosh Truck Corp. (producer manufacturing), Corporate Executive Board Co. (commercial services) and FormFactor (electronic technology). Cal Drive International (industrial services) was the worst-performing individual stock contributor during the month, with Marvell Technology Group (electronic technology) coming in a close second.
Outlook
Throughout the Fund's existence, our philosophy has not changed. We look to invest in stocks that present the best trade-off between growth opportunity, business and financial risk, and valuation. We focus on innovative, rapidly growing companies in a variety of industries and across all market capitalization sizes. We search for companies with identifiable growth drivers, such as new product development, leverage to a change in the economy, or secular industry growth. We look for companies with strong balance sheets, capable of investing in future growth and gaining market share. We also look for companies with strong operating leverage or the ability to increase profit margins as sales grow.
We remain optimistic about the prospects for the U.S. equity markets, and we continue to position the portfolio to benefit from further growth in the domestic economy. In our view, the investment backdrop remains mostly favorable. Real interest rates are still relatively low,inflation seems under control, and inventory levels in most areas are healthy. While GDP growth might slow moderately, we believe that these factors should continue to fuel economic expansion, thus leading to growth in corporate profits.
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Franklin Aggressive Growth comment - Oct 05
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Friday, 18 November 2005
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Fund Manager Comment
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Franklin Aggressive Growth Fund outperformed its benchmark, the Russell 3000 Growth Index, in October, producing a net return of +0.18% (in US dollars), compared with -1.21% for the benchmark.
The largest positive contribution to relative out-performance came from stock selection in the electronic technology sector, a sector in which the Fund has a slight overweight position and which represents the largest weighting in the portfolio. In addition, the Fund's second-largest positive contribution came from health technology. A combination of superior stock selection and a slight over-weighting drove the Fund's performance in this sector. The biggest detractor to relative performance came from stock picking in the technology services sector, due to a combination of portfolio allocation and stock selection.
Sub-sectors within electronic technology that contributed to the Fund's out-performance included computer peripherals, computer processing hardware, and electronic production equipment. Within health technology, the major pharmaceutical, medical specialities, and generic pharmaceutical sub-sectors all contributed positively. While internet software/services contributed positively, negative contributions came from three other sub-sectors of technology services - data processing, packaged software, and information technology services.
On an individual stock level, notable positive contributions came from Network Appliance (electronic technology), Google (technology services), and Advanced Neuromodulation Systems (heath technology). Respironics (health technology) was the worst performing individual stock contributor during the month, with NAVTEQ (technology services) coming in a close second.
Network Appliance, a unified storage solutions company, saw a positive run on its stock during the month, triggered by positive corporate deal news. While the company's stock had recently traded as low as USD22.50, it began to rally in October, hitting a high of USD27.08 on October 28.
Likewise, Google traded up during the month, as the company issued very positive earnings news. The company reported third-quarter earnings that were seven times higher and revenues that were double what they were 12 months earlier. In October, Google announced that it was testing a new service called Google Base, which would put it in direct competition with eBay.
The share price of Advanced Neuromodulation Systems (ANS) rose 30% in October, as it emerged that the company had become an acquisition target for St. Jude Medical.
By contrast, Respironics, which specializes in global sleep and respiratory products, and which was a top performing stock for the Fund earlier in the year, saw support for its stock soften during the month. Respironics' share price slid more than 5% in one day in late October, even after it said its annual income would match analysts' estimates. Share support for NAVTEQ, a provider of Franklin Templeton Investments FUND COMMENTARY digital navigation systems, also weakened as the company slightly missed third-quarter earnings estimates.
Outlook
In general, the investment background remains positive. The U.S. economy is still in good health, interest rates are still relatively subdued and the unemployment rate is very low. Inflation and rising rates need to be monitored, but this environment creates a favorable background for equities.
We have some concerns about the health of the consumer given the recent spike in energy prices and softening of some housing data. By contrast, corporations overall remain extremely healthy. Strong cash flow growth, low debt levels and high levels of profitability should lead to more capital expenditures.
The level of innovation in the U.S. remains high across many sectors, with new products and services continually being introduced. Looking at historic earnings yields compared with long-term interest rates, equities are still not expensive.
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Franklin Aggressive Growth comment - Jul 05
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Wednesday, 14 September 2005
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Fund Manager Comment
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PERFORMANCE
The Franklin Biotechnology Discovery Fund advanced a net 12.48% ('A' class shares, in U.S. dollars) in July, compared to an 11.96% increase for the fund's benchmark, the NASDAQ Biotechnology Index.
BIOTECHNOLOGY SECTOR UPDATE
July was a spectacular month for the biotechnology sector in terms of stock price performance. The sector was led by strong earnings reports by several of the large-cap biotechnology companies. Also, good news items outnumbered the bad, and investors were drawn to the small-cap companies as potential acquisition candidates following Pfizer's acquisition of Vicuron in June.
Positive news during July:
- Amgen, Genentech, Gilead Sciences and Genzyme reported strong quarterly results
- Genentech presented highly positive phase III data on Lucentis in Age-Related Macular Degeneration
- Biogen IDEC and Protein Design Labs announced a development collaboration on three antibodies in phase II development
- UCB Pharma announced positive phase III data for Cimzia in Crohn's disease
- Invitrogen acquired Biosource International
- Millennium Pharmaceuticals divested Integrilin to improve focus on Velcade and the clinical pipeline
- MGI Pharma acquired Guilford Pharmaceuticals
Negative news during July:
Genzyme reported mixed data from its D-COR trial studying mortality and morbidity outcomes with Renagel
- Incyte Pharmaceuticals announced mixed data on its phase II HIV drug Reverset
- The U.S. Food & Drug Administration (FDA) requested an additional study for Adolor's Entereg
- Critical Therapeutics reported disappointing phase II data on Zyflo for Acne
TOP PERFORMING STOCKS OVER THE PAST MONTH
Amgen was the biggest contributor to performance during July. Amgen was our largest position and appreciated approximately 32% during the month. Amgen's advance was largely in response to strong second quarter operating results.
In terms of absolute performance, Kosan Biosciences and Supergen were the top performing stocks in the portfolio. Kosan Biosciences rose following positive data presented on KOS-953 in June and off a low valuation. Supergen shares advanced in anticipation of FDA approval of most important pipeline compound Dacogen.
WORST PERFORMING STOCKS OVER THE PAST MONTH
Sepracor was the largest detractor from performance, with shares declining approximately 13% during the month. We believe that Sepracor's decline was largely related to FDA approval of a competing agent to Lunesta for the treatment of Insomnia.
In terms of absolute performance, Affymetrix was the worst performing stock in the portfolio. Affymetrix reported disappointing second quarter results. Fortunately, Affymetrix was a small position in the portfolio, muting the overall impact.
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Franklin Aggressive Growth comment - Jun 05
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Tuesday, 16 August 2005
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Fund Manager Comment
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Franklin Aggressive Growth Fund returned a net +2.81% (A (acc) class shares, in U.S. dollars) in the second quarter, outperforming the benchmark Russell 3000 Growth, which returned +2.55% over the same period.
On a sector basis, the best contributions to relative performance in the second quarter came from an over-weighting of technology and commercial services stocks, as well as an under-weighting of consumer non-durables and individual stock selection in that sector.
Within technology services, the segment that worked best for the fund in the second quarter was Internet Software/Services. This encompasses our over-weight position in Google, a stock that rose 63% in the second quarter. In the IT segment, our absence from the capital of IBM (whose stock fell 18.6% in the second quarter) helped our relative performance. In commercial services, we benefited from an overweight position in Business Executive Services. This company, whose principal activity is the provision of corporate research and quantitative analysis, saw its stock rise almost 23% in the second quarter. Our overweight position in ratings agency Moody's also proved beneficial. As mentioned, our under-weighting of consumer non-bles helped our relative performance, as this sector generally under-performed. However, stock selection also helped us in consumer durables, with our overweight position in footwear company Coach, Inc. providing one of the highest relative contributions over the quarter.
On the negative side, disappointing contributions came from the finance, health technology and electronic technology sectors. In Finance, our performance was actually quite mixed, with poor performances from the likes of CapitalSource and Investors' Financial Services Corp. compensate by the strong returns we earned from our overweight position in the Chicago Mercantile Exchange. The picture is similar in health technology; we were helped by our positions in small companies like Respironics and biotech company Celgene, but were hurt by our underweighting of the pharmaceutical giant Pfizer. The most disappointing contribution came from the electronic technology sector, with much of the disappointment coming from semiconductor stocks.
Outlook
The economic backdrop in the U.S. is favourable. Inflation is fairly low; GDP is still growing quite strongly; there are a lot of companies out there with low levels of debt and high levels of free cash flow, and many of them are returning cash to shareholders in the form of stocks buy-backs and increasing their dividends. Investors are still demanding a relatively high-risk premium for high-growth stocks, but technology stocks in particular are very seasonable. In 11 out of the past 12 years, technology has outperformed the overall market in the second half of the year. Longer term, the trend towards globalisation, demographic trends and the pace of innovation across the world serve to heighten the attractiveness of an aggressive growth portfolio.
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Franklin Aggressive Growth comment - Mar 05
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Friday, 29 April 2005
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Fund Manager Comment
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In the three months to March 31, 2005, Franklin Aggressive Growth Fund decreased 6.38% (in US dollars), under-performing our primary benchmark, the Russell 3000 Growth Index, which decreased 4.32%. During the period, large cap stocks outperformed smaller stocks, with the Russell 1000 Growth Index decreasing 4.09% and the Russell 2000 Growth Index falling 6.83%. Value stocks performed better than growth stocks in the quarter, as the Russell 3000 Value index declined only 0.26%.
On a sector basis, the best contributions to relative performance came from superior stock selection in the Transportation sector (where the fund has a slight over-weighting) as well as from stock selection and an under-weighting of the poor-performing Finance sector. However, the sectors to which these stocks belonged either had a negative or indifferent impact on overall fund performance. Indeed, stock selection in the Health Technology sector was the largest detractor from relative performance in the first quarter, followed by Electronic Technology. Process Industries also contributed negatively, while a neutral or very slight positive impact came from Technology Services and Product Manufacturing.
Outlook
Throughout the Fund's existence, our philosophy has not changed. We look to invest in stocks that present the best trade-off between growth opportunity, business and financial risk, and valuation. We focus on innovative, rapidly growing companies in a variety of industries and across all market capitalization sizes. We search for companies with identifiable growth drivers, such as new product development, leverage to a change in the economy, or secular industry growth. We look for companies with strong balance sheets, having the ability to invest in future growth and gain market share. We also look for companies with strong operating leverage, or the ability to increase profit margins as sales grow.
We remain optimistic about the prospects for the U.S. equity markets, and we continue to position the portfolio to benefit from continued growth in the domestic economy. In our view, the investment backdrop remains mostly favorable, but the deceleration of growth has caused many growth stocks to correct. Interest rates are still relatively low despite the Federal Reserve's recent increases in the Fed Funds Rate. Inflation is showing signs of increasing, but is still moderate, and inventory levels in most areas are in check. Although the pace of growth is slowing, we believe that these factors should continue to fuel economic growth, leading to continued growth in corporate profits. We have positioned the Fund accordingly.
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Franklin Aggressive Growth comment - Feb 05
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Wednesday, 23 March 2005
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Fund Manager Comment
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For equity investors, the month of February was slightly positive, as most market indices were higher during the month, but were very volatile. With so much focus on interest rates, oil prices, and inflation, daily economic news and commodity price fluctuations tend to cause much volatility.
During the month, the Franklin Aggressive Growth Fund was down .19%, under-performing the Fund's primary benchmark, the Russell 3000 Growth Index, which was up 1.09%. In February, value stocks outperformed growth stocks, as the Russell 3000 Value increased 3.20%. As well, smaller stocks generally outperformed larger stocks, with the Russell 2000 Growth Index gaining 1.37% during the month compared against the Russell 1000 Growth Index, which increased 1.06%.
Relative to the benchmark, the Fund benefited from strong stock selection in Retail Trade and Technology Services. However, more than offsetting the strong stock selection in those two sectors, the fund was negatively impacted from poor stock selection in the Electronic Technology and Health Technology sectors.
We continue to look to invest in stocks that present the best trade-off between growth opportunity, business and financial risk, and valuation. We focus on innovative, rapidly growing companies in a variety of industries and across all market capitalization sizes. We search for companies with identifiable growth drivers, such as new product development, leverage to a change in the economy, or secular industry growth. We look for companies with strong balance sheets, having the ability to invest in future growth and gain market share. We also look for companies with strong operating leverage, or the ability to increase profit margins as sales grow.
We remain optimistic about the prospects for the U.S. equity markets, and we continue to position the portfolio to benefit from continued growth in the domestic economy. In our view, the investment backdrop continues to be favorable despite the expected slower levels of growth, continued geopolitical uncertainty, and higher oil prices. Inflation needs to be watched but still seems to be primarily in the commodity goods, inventory levels in most cases remain moderate, and recent U.S job statistics are positive. Overall, we believe that these factors combined could continue to fuel moderate economic growth and rising corporate profits, which is a good environment for innovative companies.
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Franklin Aggressive Growth comment - Sep 04
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Thursday, 18 November 2004
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Fund Manager Comment
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For most equity investors, the month of September was good, as the major markets ended the month positive. Prospects for slower but still positive corporate profit growth and some negative earnings forecasts seemed to get digested in the market.
During the month, the Franklin Aggressive Growth Fund was up 5.92%, outperforming the Fund's primary benchmark, the Russell 3000 Growth Index, which was up 1.31%. In September, growth stocks slightly under-performed value stocks, as the Russell 3000 Value increased 1.75%. As well, smaller stocks generally outperformed larger stocks, with the Russell 2000 Growth Index rising 5.53% during the month.
Relative to the benchmark, the Fund benefited from strong stock selection in Health Technology, Technology Services, and Electronic Technology, three of the Fund's largest sectors.
We continue to look to invest in stocks that present the best trade-off between growth opportunity, business and financial risk, and valuation. We focus on innovative, rapidly growing companies in a variety of industries and across all market capitalization sizes. We search for companies with identifiable growth drivers, such as new product development, leverage to a change in the economy, or secular industry growth. We look for companies with strong balance sheets, having the ability to invest in future growth and gain market share. We also look for companies with strong operating leverage, or the ability to increase profit margins as sales grow.
We remain optimistic about the prospects for the US equity markets, and we continue to position the portfolio to benefit from continued growth in the domestic economy. In our view, the investment backdrop continues to be favorable despite the slowing growth, political uncertainty, and higher oil prices. Inflation is still benign, inventory levels need to be watched, but remain moderate, and the US job market is still showing moderate growth. Overall, we believe that these factors combined could continue to fuel moderate economic growth and rising corporate profits, which is a good environment for innovative companies.
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Franklin Aggressive Growth comment - Jun 04
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Friday, 13 August 2004
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Fund Manager Comment
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For most equity investors, the second quarter ending June was encouraging as the major market indices increased. Prospects for continued corporate profit growth, and healthy job growth statistics in the US seemed to outweigh the continued geopolitical turmoil. Furthermore, the rising interest rate prospects seemed to get absorbed in the market.
During the quarter, the Franklin Aggressive Growth Fund was up 2.35%, outperforming the Fund's primary benchmark, the Russell 3000 Growth Index, which was up 1.79%. During the quarter, growth stocks outperformed value stocks, as the Russell 3000 Value increased 0.88%. As well, larger stocks generally outperformed smaller stocks, with the Russell 2000 Growth Index up only 0.09% during the period.
Relative to the benchmark, the Fund benefited from strong stock selection in Technology Services, Process Industries, Distribution Services, Finance, Electronic Technology, and Commercial Services. However, this was partially offset by poor stock selection in Health Services, Producer Manufacturing and Consumer Services, which negatively impacted the Fund's performance during the quarter.
We continue to look to invest in stocks that present the best trade-off between growth opportunity, business and financial risk, and valuation. We focus on innovative, rapidly growing companies in a variety of industries and across all market capitalization sizes. We search for companies with identifiable growth drivers, such as new product development, leverage to a change in the economy, or secular industry growth. We look for companies with strong balance sheets, having the ability to invest in future growth and gain market share. We also look for companies with strong operating leverage, or the ability to increase profit margins as sales grow.
We remain optimistic about the prospects for the U.S. equity markets, and we continue to position the portfolio to benefit from continued growth in the domestic economy. In our view, the investment backdrop remains favorable despite the geopolitical uncertainty, higher oil prices, and the prospect of rising interest rates. Inflation is still benign, inventory levels remain moderate, and the U.S job market is showing signs of growth. Overall, we believe that these factors combined could continue to fuel economic growth and rising corporate profits.
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Franklin Aggressive Growth comment - Sep 03
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Thursday, 20 November 2003
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Fund Manager Comment
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The subfund's performance in September was negatively impacted by the funds exposure to the Electronic Technology, Consumer Services, and Retail Trade sectors. The subfund's Technology Services and Health Technology holdings generated relative strength during the month. Strong stock selection in the Distribution Services sector also helped the subfund's relative performance.
For equity investors, September was a volatile month, starting out strongly, retreating, and then finishing down slightly. Similarly, economic data released during the month was a mixed bag, as is often the case during the early stages of a recovery. The last two jobless claims figures were better than expected, and second quarter GDP growth was revised upwards to 3.3%. This positive news was somewhat offset by a decline in consumer confidence. Nonetheless, the fund manager's are optimistic about economic growth going forward. Anecdotal evidence and commentary from corporations witnessed a strong end to the third quarter, although there were few earnings pre-announcements.
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Franklin Aggressive Growth comment - May 03
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Monday, 23 June 2003
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Fund Manager Comment
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Since the end of the Iraq war, investment psychology has improved and the risk premium demanded by investors has declined. As well, the prospects for economic growth continue to receive support from a confluence of stimulative forces, not the least of which is the surging equity market itself. We remain optimistic about the prospects for the US equity markets. Interest rates and inventory levels remain low, and inflation is moderate. In May, the fund outperformed its primary benchmark, the Russell 3000 Growth index. The fund manager's continue to position the portfolio to benefit from a recovery in the domestic economy. In May, the funds performance was aided by the funds positions in Health Technology, particularly biotechnology stocks, Electronic Technology, Health Services, Technology Services, and Retail. The funds positions in Commercial Services and the lack of exposure to Consumer Non-Durables hurt relative performance during the month.
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Franklin Aggressive Growth comment - Apr 03
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Thursday, 22 May 2003
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Fund Manager Comment
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In April, the fund outperformed its primary benchmark, the Russell 3000 Growth index, which rose 7.5% (in dollars). Value stocks outperformed growth stocks, as the Russell 3000 Value index was up 8.6% (in dollars). In addition, small-cap stocks slightly outperformed large-cap equivalents during April, and this helped the funds relative performance. The funds exposure to small-cap stocks is higher than that of the funds benchmark. The fund manager's continue to position the portfolio to benefit from a recovery in the US economy. The funds April performance was aided by positions in Electronic Technology, Consumer Services, Commercial Services, and Retail. By contrast, the funds positions in Finance and Producer Manufacturing hurt relative performance during the month. The fund manager's remain optimistic about the prospects for the US equity markets. Interest rates and inventory levels remain low and inflation is moderate. The fund manager's believe these factors could help lead to economic recovery and sustained growth and have positioned the fund accordingly.
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Franklin Aggressive Growth comment - Dec 02
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Monday, 10 February 2003
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Fund Manager Comment
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After two extremely strong months, the US equity markets cooled off in December. While every major market indices fell during the month, value stocks performed better than growth stocks. The Russell 3000 Value index fell roughly 4.5% (in dollars), while the Russell 3000 growth index fell roughly 6.9%. The fund manager's have been positioning the portfolio to benefit from a rebound in the US economy. While the fund manager's continue to see signs of a moderate economic rebound, the market remains concerned about the prospects for sustained growth, particularly in the face of geopolitical turmoil and high energy prices. In addition, in the course of December several companies pre-announced disappointing quarterly results. The fund's underperformance during the month was largely due to exposure to economically sensitive sectors. The funds positions in Electronic Technology, Retail, Finance, and Health Technology hurt performance during the period. Conversely, the funds Transportation and Process Industry holdings helped performance.
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