FZBAX — Franklin Flexible Alpha Bond Fund
Data updated: 2019-12-27
FZBAX — Franklin Flexible Alpha Bond Fund. Money Market · $405.73M AUM · 0.92% expense ratio. Holdings, fees, performance and SEC filings.
FZBAX Fund Overview
FZBAX — Franklin Flexible Alpha Bond Fund is a US mutual fund managed by Franklin Strategic Series, categorised as Money Market. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.
- Type: US mutual fund
- Manager: Franklin Strategic Series
- Category: Money Market
- Assets under management: $405.73M
- Ticker: FZBAX
- SEC CIK: 0000872625
- SEC series ID: S000050257
- Share class ID: C000158680
FZBAX Investment Objective and Strategy
Franklin Flexible Alpha Bond Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Franklin Strategic Series.
Investment objective
Total return through a combination of current income and capital appreciation.
Principal investment strategy
"In pursuing its investment goal, the Fund seeks to provide attractive risk-adjusted total returns over a full market cycle by allocating its portfolio across a broad range of global debt asset classes. A full market cycle is a period of time that spans a full business and economic cycle, which may include periods of rising and declining interest rates. In managing the Fund, the investment manager seeks to generate returns from various sources, other than solely from interest income, by allocating the Fund's portfolio across various risks (such as credit, currency and duration risks). In employing this strategy, the investment manager has the flexibility to invest across all debt asset classes without regard to country, sector, quality, maturity or duration and without reference to a benchmark index.
Under normal market conditions, the Fund invests at least 80% of its net assets in ""bonds"" and investments that provide exposure to bonds. For purposes of this 80% policy, ""bonds"" include, but are not limited to: debt obligations of any credit quality, maturity or duration; all varieties of fixed income, variable rate and floating rate debt securities and investments; money market instruments; and derivatives, such as swap agreements, futures contracts and options, and other instruments, such as exchange-traded funds and other pooled investment vehicles, that provide exposure to bonds. The Fund may engage in active and frequent trading as part of its investment strategies and, at any given time, may have a substantial amount of its assets invested in any class of debt securities, including, but not limited to: U.S.
government and agency securities; foreign government and supranational debt securities; corporate bonds; corporate loans (and loan participations); collateralized debt and loan obligations; preferred securities; various types of mortgage-backed securities and other asset-backed securities (including covered bonds); municipal securities; and derivatives and other instruments with similar economic characteristics, or that provide exposure, to such debt securities. The Fund's weighted average portfolio duration, as calculated by the investment manager, may typically range from -2 to +5 years, and includes the effect of the Fund's derivative investments. Duration is a measure of the expected price volatility of a debt instrument as a result of changes in market rates of interest, based on the weighted average timing of the instrument's expected principal and interest payments and other factors.
Generally, when interest rates rise, the price of an investment with a positive duration would be expected to decrease, and the price of an investment with a negative duration would be expected to increase. The investment manager may seek to adjust the Fund's weighted average duration from time to time through the purchase and sale of securities and derivatives, depending on the investment manager's forecast of interest rates and assessment of market risk generally. The Fund may invest in securities and other investments that are traded in the United States or in markets outside of the United States. In addition, the Fund may invest in both investment grade securities and high yield securities (also known as ""junk bonds""), including a portion in distressed debt securities and securities that are in default.
In addition, the Fund takes long and/or short positions in debt securities or other instruments by using derivatives to gain or hedge exposure to select instruments, currencies, interest rates, countries, duration or credit risks. The derivative instruments the Fund may use include, among other instruments, futures contracts (including interest rate/bond futures and futures on credit default swap indices) and options thereon, and swaps (including inflation index, total return, credit default and interest rate swaps) and options thereon. The Fund also regularly enters into various currency related transactions involving derivative instruments, including forward currency contracts, currency futures contracts and options thereon, options on currencies and currency swaps. These derivatives may also be used to enhance Fund returns, increase liquidity, gain exposure to certain instruments or markets in a more efficient or less expensive way and/or hedge risks associated with its other portfolio investments.
The Fund may maintain significant positions in currency related derivative instruments as a hedging technique or to implement a currency investment strategy, which could expose a large amount of the Fund's assets to obligations under these instruments.The results of the Fund's investment in derivatives may represent, from time to time, a material component of the Fund's investment returns. The investment manager considers various factors, such as availability and cost, in deciding whether, when and to what extent to enter into derivative transactions. The Fund's investment manager purchases and sells securities and other investments in various market sectors based on the investment manager's assessment of changing economic, market, industry and issuer conditions. The investment manager uses a ""top-down"" analysis of macroeconomic trends, combined with a ""bottom-up"" fundamental analysis of market sectors, industries and issuers, to try to take advantage of varying sector reactions to economic events.
In addition, the investment manager attempts to minimize exposure to those areas that it anticipates will not provide value or will produce declines in the Fund's returns. This includes incorporating various macro and security specific hedging activities, many through derivative transactions, into the portfolio management process."
FZBAX Holdings
Top 10 holdings of Franklin Flexible Alpha Bond Fund by percentage of net assets, from the fund's latest SEC N-PORT filing.
| Holding | % of net assets |
|---|---|
| Ift Money Market Portfolio Oemf-Sweep Money Market Portfolio | 6.34% |
| Govt Natl Mortg Assn 3.5% 10/01/2049 Sf2 | 4.01% |
| Fannie Mae or Freddie Mac 3% 10/01/2049 FNL | 2.03% |
| Federal Home Loan Mortgage Corp. 2.5% 10/01/2034 Fni | 2.03% |
| Voya Clo Ltd. Frn 04/25/2031 2013-2a A1r 144a | 1.78% |
| Atrium XII FRN 04/22/2027 144A 12A AR | 1.72% |
| Centurylink, Inc. 6.45% 06/15/2021 | 1.22% |
| Navient Corp. 8.00% 03/25/2020 | 1.18% |
| Turkiye Vakiflar Bankasi Tao 2.375% 11/04/2022 Reg S | 1.05% |
| Madison Park Euro Funding XIV DAC FRN 07/15/2032 144A 14A A1N | 1.05% |
FZBAX Portfolio Allocation
Asset-class allocation of Franklin Flexible Alpha Bond Fund by percentage of net assets, from the latest SEC N-PORT filing.
| Asset class | Allocation |
|---|---|
| Securitized | 70.8% |
| Fixed Income | 31.8% |
| Derivatives | 14.1% |
| Equity | 6.3% |
| Loans | 0.3% |
FZBAX Costs and Fees
FZBAX costs about $92 per $10,000 invested per year in fund expenses.
- Net expense ratio: 0.92%
- Gross expense ratio: 1.01%
- Portfolio turnover: 25%
- Brokerage commissions: 0.45 bps of average net assets (SEC N-CEN)
FZBAX Cashflows
Over the 12 months to 2019-10, Franklin Flexible Alpha Bond Fund had net inflows of $179.01K, from monthly SEC N-PORT filings.
| Month | Net flow |
|---|---|
| 2019-10 | −$53.62K |
| 2019-09 | −$88.45K |
| 2019-08 | $321.07K |
FZBAX Debt Constituents
Largest debt holdings of Franklin Flexible Alpha Bond Fund by percentage of net assets, from the latest SEC N-PORT filing.
| Debt holding | % of net assets |
|---|---|
| Centurylink, Inc. 6.45% 06/15/2021 | 1.22% |
| Navient Corp. 8.00% 03/25/2020 | 1.18% |
| Turkiye Vakiflar Bankasi Tao 2.375% 11/04/2022 Reg S | 1.05% |
| U S Treasury Note/bond I/l 0.375% 07/15/2027 Index Linked To Cpurnsa | 1.01% |
| State Grid Overseas Investment 2016 Ltd. 3.50% 05/04/2027 144a | 0.91% |
| Export-Import Bank Of India 3.875% 02/01/2028 144a | 0.89% |
| U S Treasury Note/bond I/l 0.625% 01/15/2026 Index Linked To Cpurnsa | 0.79% |
| Banca Popolare Di Milano Scrl 0.625% 06/08/2024 Reg S | 0.78% |
| U S Treasury Note/bond I/l 0.125% 07/15/2026 Index Linked To Cpurnsa | 0.74% |
| Spain Government Bond 2.7% 10/31/2048 144A REG S | 0.71% |
FZBAX Prospectus and SEC Filings
Official Franklin Flexible Alpha Bond Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.
Related Funds
Other Money Market funds tracked on ABC INVEST:
Data Sources
ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.