During his college days, Ed Perks had all the right stuff on the football field, setting records as a kicker on Yale University’s team. For the past 21 years, he’s been playing on the Franklin Templeton team.
Perks joined Franklin Templeton in 1992 and currently serves as Director of Portfolio Management for Franklin Equity Group®. He joined the Franklin Income Fund portfolio management team in 2002. In 2004, he became the fund’s lead portfolio manager, with some big shoes to fill. In its 65-year history, the fund has had only two other lead managers, Rupert Johnson Sr. and Charlie Johnson. The affable Perks rose to the occasion, championing their legacy with a complementary style of his own.
Beyond Bulls & Bears sat down with Perks to gain some insight into his game plan as a global portfolio manager, and what lessons he’s learned from his mentors.
Beyond Bulls & Bears: What’s the best advice you have received during your tenure as a portfolio manager?
Ed Perks: I’ve received a lot of advice, some of it useful, some not as much. I think the best advice I have received is, when faced with a really challenging environment, to make sure you stay focused on your objective and what you are trying to accomplish. That advice came from Charlie Johnson, and it has helped me stay focused in many different market environments. We all have to deal with challenges at times, but I try to keep that objective in mind on a daily basis.
Beyond Bulls & Bears: How did you first become interested in the mutual fund industry?
Ed Perks: I think it goes back to growing up in the New York City area and being close to the financial markets. In college I was able to study a bit more about investment management, and that’s really when my interest grew in pursuing a career in the industry. I moved out to California in 1992 and joined Franklin Templeton, a very established player where I knew I would have the chance to learn more about the industry.
Beyond Bulls & Bears: How do you deal with the pressures of the job? There are a lot of investors counting on you to deliver performance.
Ed Perks: I think everybody handles pressure in a different way, and there are different types of pressure. I have a tremendous team, and I think it’s important to reach out continually, using our resources to try to understand what’s happening in the markets and how our portfolios will be impacted. That’s really how I try to deal with the pressures of the job – knowing I have the support of a tremendous group of people who all want what’s best for our clients.
Beyond Bulls & Bears: What’s the toughest part of your job, and the most rewarding part?
Ed Perks: I think the toughest parts of the job are the challenging situations that we face at times. In the last decade or so, we’ve seen some fairly volatile markets. My strategies try to emphasize a fair amount of diversification, but in certain environments even that doesn’t protect you. Those are the tough times. I think we try to get through those periods by really focusing on the process we have and the approach that has served us well over the long term.
The most rewarding part of the job is hearing the individual stories from financial advisors and long-term investors who are pleased with us. I feel like we are really making a contribution to a broad range of clients, helping them pursue their goals in life.
Beyond Bulls & Bears: Who do you most look up to in the investment world?
Ed Perks: I’ve had the pleasure of working closely with Charlie Johnson, learning how he has approached investing over such a long period of time. He’s someone who really stands out in helping shape my career. Unfortunately for me, I never got to meet Sir John Templeton, but hearing his stories and how he approached investing also really resonates with me. I also like to read as much as I can about different investors and how they view the markets.
Beyond Bulls & Bears: What defines your approach as a portfolio manager?
Ed Perks: I really enjoy what I’m doing. I like being able to look at different markets, make judgments about relative value in a given environment, and pursue investments I think can deliver income generation as well as offer some capital appreciation potential over time.
Beyond Bulls & Bears: What’s the most challenging or memorable market period you have faced during your career in investment management?
Ed Perks: There have been several fairly memorable and challenging environments. Earlier on in my career, witnessing the technology boom and bust in the late 1990s was something that, initially, I had a hard time with. I didn’t find myself very attracted to securities that were trading at what I saw as exorbitant valuations. I was really driven more by finding income and securities offering value. Ultimately, as the situation played out and my role evolved, I found a spot that I’m more comfortable in as an investor. I think that was an important lesson for me from a pretty memorable time in the markets—not to go against my instincts.
More recently, the financial crisis of 2008-2009 was certainly among the most challenging periods. On a daily basis it was very difficult to predict what was happening in the markets and how it would evolve. I think one of the things that really helped me get through that time was to focus on some of the earlier lessons that I had learned about how to approach the market: Pay attention to what’s happening in the market and where there might be an opportunity, and stay very focused on what our objective is for the portfolios. During periods of tremendous near-term uncertainty, we have to remember to stay focused on what we’re trying to accomplish over the long-term. It’s important for us to help our investors do that as well.
Beyond Bulls & Bears: What are you interested in or passionate about outside of work?
Ed Perks: I have a number of different interests. I have two boys at home and enjoy playing sports with them. I also like paddle boarding and kayaking, and enjoy golf. I think in general, living in Northern California does afford a lot of opportunity to be outside and to be active, so I really take advantage of that. [php function = 1]
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What Are the Risks?
All investments involve risks, including possible loss of principal. Franklin Income Fund’s 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. Investments in lower-rated, higher-yielding instruments include higher risk of default and loss of principal. These securities carry a greater degree of credit risk relative to investment-grade securities. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions These and other risk considerations are discussed in the prospectus.