Playing the Dividend Yield Field
July 5, 2012

In the already quite tiresome battle against low-yield, dividends have emerged as an attractive opportunity set to help counter investment stagnation. For this Beyond Bulls & Bears post we thought we’d shake things up a bit, bringing you a one, two, three dividends punch with not one, but three fund managers with expertise in dividend-paying stocks.  See below for a 4 1/2- minute video featuring Ed Perks, who manages Franklin Income Fund and Franklin Balanced Fund, Alan Muschott, co-manager for Franklin Equity Income Fund and Don Taylor, portfolio manager for Franklin Rising Dividends Fund, as they break down how they’ve been weathering market volatility and unearthing dividend-paying stock opportunities.

Watch the video.

Want to learn more about the funds managed by Ed Perks, Alan Muschott, and Don Taylor?  Click these links for the fund product pages:

Franklin Income Fund

Franklin Balanced Fund

Franklin Equity Income Fund

Franklin Rising Dividends Fund 

What Are the Risks?

All investments involve risks, including potential loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Companies cannot assure or guarantee a certain rate of return or dividend yield; they can increase, decrease or totally eliminate their dividends without notice. A fund’s investment return and principal value will fluctuate with market conditions, and it is possible to lose money.

Franklin Equity Income Fund invests in convertible securities, which are subject to the risks of stocks when underlying stock price is high relative to the conversion price and debt securities when the underlying stock price is low relative to the conversion price. The fund’s investment in foreign securities also involves special risks, including currency fluctuations and economic as well as political uncertainty. These and other risks are described more fully in the Franklin  Equity Income Fund’s prospectus.

Franklin Income Fund’s portfolio includes a substantial portion of higher yielding, lower-rated corporate bonds because of the relatively higher yields they offer.  Share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline. Changes in the financial strength of a bond issuer or in a bond’s credit rating may affect its value. Floating-rate loans are lower-rated, higher-yielding instruments, which are subject to increased risk of default and can potentially result in loss of principal. These securities carry a greater degree of credit risk relative to investment-grade securities. These and other risk considerations are discussed in the Franklin Income Fund’s prospectus.

Franklin Rising Dividends Fund’s investment in value securities carries special risks, as they may not increase in price as anticipated or may decline further in value. While smaller and midsize companies may offer substantial opportunities for capital growth, they also involve heightened risks and should be considered speculative. Historically, smaller- and midsize- company securities have been more volatile in price than larger company securities, especially over the short term. These and other risks are detailed in the Franklin Rising Dividends Fund’s prospectus.

Franklin Balanced Fund’s share price and yield will be affected by interest rate movements. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in the fund adjust to a rise in interest rates, the fund’s share price may decline.  These and other risks considerations are described more fully in the Franklin Balanced Fund’s prospectus.

 

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