This series of three model portfolios from Franklin Templeton—Growth & Income, Growth & Enhanced Income, and Income—is run by a team with a lot of resources, but it’s still in the process of integrating. The team has a fairly short asset allocation track record, and the underlying holdings it uses here includes both standouts and less-proven fare. The portfolios earn a Morningstar Analyst Rating of Neutral.
These portfolios, launched in mid-2019, have targeted equity weightings of 40% (Growth & Income), 30% (Growth & Enhanced Income), and 15% (Income). Each portfolio has a substantial weighting in Franklin Income, a multiasset fund with an equity weighting that typically ranges from 30% to 50% of assets. Also, Franklin’s multiasset team makes tactical allocation calls, based on its view of the next 6 to 18 months, which can shift equity weightings by up to 10 percentage points. The team has a short track record (a bit over three years) of making such calls at its various charges.
The team is large, but generally untested. Franklin’s legacy multiasset team, which consists of more than 60 members, just began coming together in in 2017. As a result of Franklin’s acquisition of Legg Mason in July 2020, the team is now working to integrate QS Investors into the fold. That team of quantitative researchers isn’t yet having much impact here.
The portfolios’ list of underlying holdings has already seen substantial changes. Several of Legg Mason’s legacy offerings, such as Morningstar medalists ClearBridge Large Cap Growth and Western Asset Core Plus Bond, replaced weaker Franklin offerings in January 2021. But even after these upgrades—which resulted in slightly higher fees for the model portfolios--the overall holdings roster doesn’t stand out from the competition as it includes Neutral-rated Franklin Income, Franklin High Income and Franklin Liberty Investment Grade Corporate.
Model portfolios only provide guidance, users must implement their suggested trades and rebalance on their own. Investors’ results will vary depending on how closely they follow this profile’s recommendations.
General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.