Franklin K2 Long Short Credit R
Name
As of 05/12/2023Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
Vitals
YTD Return
-5.9%
1 yr return
-13.9%
3 Yr Avg Return
-4.1%
5 Yr Avg Return
-3.9%
Net Assets
$87.1 M
Holdings in Top 10
34.8%
52 WEEK LOW AND HIGH
Expenses
OPERATING FEES
Expense Ratio 2.48%
SALES FEES
Front Load N/A
Deferred Load N/A
TRADING FEES
Turnover 194.81%
Redemption Fee N/A
Min Investment
Standard (Taxable)
$1,000
IRA
$250
Fund Classification
Fund Type
Open End Mutual Fund
Name
As of 05/12/2023Price
Aum/Mkt Cap
YIELD
Exp Ratio
Watchlist
FKLRX - Profile
Distributions
- YTD Total Return -5.9%
- 3 Yr Annualized Total Return -4.1%
- 5 Yr Annualized Total Return -3.9%
- Capital Gain Distribution Frequency Annually
- Net Income Ratio 2.31%
- Dividend Yield 1.7%
- Dividend Distribution Frequency Annually
Fund Details
-
Legal NameFranklin K2 Long Short Credit Fund
-
Fund Family NameFranklin Templeton Investments
-
Inception DateSep 28, 2015
-
Shares Outstanding21876
-
Share ClassRetirement
-
CurrencyUSD
-
Domiciled CountryUnited States
-
ManagerRobert Christian
Fund Description
The Fund seeks to achieve its investment goal by allocating its assets across multiple “alternative” strategies in the fixed-income and credit areas, including, but not limited to, some or all of the following: Credit Long Short, Structured Credit and Emerging Market Fixed Income, each of which is described below. The Fund is structured as a multi-manager fund (meaning the Fund’s assets are managed by multiple sub-advisors) and the Fund’s investment manager, K2/D&S Management Co., L.L.C. (doing business as K2 Advisors; "K2 Advisors" or the "Investment Manager"), has overall responsibility for the Fund’s investments. The Investment Manager allocates the Fund’s assets among multiple sub-advisors which, from time to time, may include sub-advisors that are unaffiliated and affiliated with K2 Advisors (Sub-Advisors).
Under normal market conditions, the Fund invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in credit-related investments. For purposes of this 80% policy, “credit-related investments” include, but are not limited to: U.S. or foreign debt obligations of any credit quality, maturity or duration; all varieties of fixed income, variable rate and floating rate debt securities and investments; and derivatives, such as swap agreements, futures contracts and options, and other transactions and instruments that provide exposure to credit-related investments. The Fund invests in a wide range of securities and other investments including, but not limited to: corporate bonds; mortgage-backed securities and asset-backed securities; U.S. Government and
agency securities; collateralized debt and loan obligations; foreign government and supranational debt securities; loans and loan participations and derivatives with similar economic characteristics. The Fund may also invest in repurchase agreements, reverse repurchase agreements, mortgage real estate investment trusts (REITs) and other similar transactions.
The Fund may invest in securities and other investments that are traded in the United States or in markets outside of the United States, including those located in emerging markets. Up to 15% of the Fund’s net assets may be invested in illiquid investments. The Fund may invest in debt securities of any credit quality or rating, including high yield (“junk”) bonds, distressed debt securities (securities of companies that are, or are about to be, involved in reorganizations, financial restructurings, or bankruptcy) and securities that are in default. The Fund may engage in active and frequent trading as part of its investment strategies.
In pursuing its investment goal, the Fund takes long and/or short positions in a wide range of asset classes, including credit, fixed income, and currencies, among others. The Fund may gain long or short exposure to select instruments by utilizing derivatives, engaging in short sales or entering into a series of purchase and sale contracts or repurchase agreements. Long positions benefit from an increase in the price of the underlying instrument, while short positions benefit from a decrease in that price. In a short sale, the Fund borrows or purchases the instrument from a counterparty, such as a bank, broker or other institution. After selling a borrowed or purchased instrument, the Fund “covers” the short sale by buying the instrument and returning it to the counterparty at a later date. If the instrument has appreciated in value, the Fund will realize a loss. If the instrument has depreciated in value, the Fund will realize a gain.
Utilizing short sales, repurchase agreements or certain derivative instruments may involve costs and create leverage in the Fund’s portfolio. The Fund may also engage in reverse repurchase agreements with brokers, dealers, banks or other financial institutions, which would also create leverage in the Fund’s portfolio. In a reverse repurchase agreement, the Fund sells a security and agrees to repurchase it at a mutually agreed upon date and price, reflecting the interest rate effective for the term of the agreement. The Fund then invests the proceeds of the reverse repurchase agreement in other instruments to generate profits. The use of leverage exaggerates the effect of any increase or decrease in the market price of securities in the Fund’s portfolio.
The Fund may also use derivatives for both hedging and non-hedging (investment) purposes, although no Sub-Advisor is required to hedge any of the Fund’s positions or to use derivatives. The Fund’s derivative investments may include, among other instruments: (i) forward currency contracts; (ii) futures contracts (including interest rate/bond futures, credit index and currency futures) and options thereon; (iii) put and call options on currencies, securities, indices and exchange-traded funds; and
(iv) swaps (including total return, credit default, currency and interest rate swaps) and options thereon. The use of these derivative transactions may allow the Fund to obtain net long or short exposures to select instruments, currencies, interest rates, countries, duration or credit risks. These derivatives may 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 results of such transactions may also represent, from time to time, a material component of the Fund’s investment returns. As a result of the Fund’s use of derivatives, the Fund may have economic leverage, which means the sum of the Fund’s investment exposures through its use of derivatives may significantly exceed the amount of assets invested in the Fund, although these exposures may vary over time.
The Investment Manager may from time to time use derivatives to adjust the Fund's exposure to certain asset classes in a manner consistent with its conditional risk overlay strategy (CRO Strategy).
Investment Management
The Investment Manager is responsible for allocating and re-allocating the Fund’s assets among the Sub-Advisors, for managing any portion of the Fund’s assets not otherwise allocated to a Sub-Advisor and for cash management. The Investment Manager’s quantitative and qualitative oversight of the Fund’s investment program aims to allocate assets among various strategies and select Sub-Advisors that it believes are well-positioned to capture unique investment opportunities while preserving capital.
The Investment Manager allocates among various investment alternative strategies utilizing a top-down approach, generating the Fund’s strategy and sub-advisor weightings by taking into account market conditions, risk factors, diversification, liquidity, transparency, and other investment options, among other things. The Investment Manager allocates the Fund’s assets to specific Sub-Advisors utilizing a bottom-up approach, selecting Sub-Advisors and their weighting within the Fund’s portfolio by taking into account their correlation to various markets and to each other, risk profiles and their return expectations. From time to time, the Fund may have little or no assets allocated to any one particular strategy or Sub-Advisor in light of economic or other conditions, as determined by the Investment Manager in its sole discretion.
The Investment Manager intends to primarily allocate the Fund’s assets to Sub-Advisors that implement some or all of the following strategies:
Credit Long Short. Credit Long Short strategies are designed to profit from pricing inefficiencies in corporate fixed income and related securities. The strategies focus on total return through current income, capital preservation, and capital appreciation. Sub-Advisors take long and/or short positions in debt securities and
other related instruments based on a fundamental analysis of the creditworthiness of a specific issuer or sector. By utilizing both long and short investments, Sub-Advisors seek to isolate issuer-specific exposure while limiting general market risks. A Sub-Advisor that employs this strategy may attempt to profit from investing in all aspects of a company’s capital structure or by investing in securities of companies undergoing corporate events through both long and short positions.
Structured Credit. Structured Credit strategies are designed to profit from trading in structured credit and other related securities. Investments include interest-rate sensitive securities such as residential and commercial mortgage-backed securities including agency residential mortgage-backed securities, REITS, credit default swaps on various indices, including tranches thereof, collateralized loan obligations and asset-backed securities (including those backed by student loans and aircraft operating leases).
Sub-Advisors attempt to take advantage of pricing inefficiencies in specific securities through both primary and secondary markets. Sub-Advisors employ both fundamental and technical analysis in identifying mispricings. These strategies typically feature long positions in individual securities and short positions in index products, which are intended to hedge out some portion of the broad market risk.
Emerging Market Fixed Income. Emerging Market Fixed Income strategies invest in corporate and/or sovereign securities in emerging markets countries with a focus on fixed income. Investments may also include foreign exchange and interest-rate sensitive securities, such as interest rate futures, swaps and swaptions. Sub-Advisors combine top-down country analysis with security-specific financial and legal analysis to identify mispriced assets. These strategies aim to manage and exploit the increased volatility characteristic of emerging markets.
FKLRX - Performance
Return Ranking - Trailing
Period | FKLRX Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | -5.9% | -21.8% | 17.7% | 34.96% |
1 Yr | -13.9% | -26.4% | 18.0% | 79.50% |
3 Yr | -4.1%* | -29.6% | 52.0% | 46.50% |
5 Yr | -3.9%* | -33.0% | 28.7% | 48.99% |
10 Yr | N/A* | -27.0% | 12.7% | N/A |
* Annualized
Return Ranking - Calendar
Period | FKLRX Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
2023 | -13.8% | -31.8% | 18.4% | 60.67% |
2022 | -0.2% | -14.3% | 103.5% | 30.58% |
2021 | 0.8% | -20.2% | 60.6% | 43.06% |
2020 | 0.6% | -13.4% | 10.9% | 75.13% |
2019 | -0.5% | -12.3% | 4.1% | 24.54% |
Total Return Ranking - Trailing
Period | FKLRX Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
YTD | -5.9% | -21.8% | 28.6% | 34.96% |
1 Yr | -13.9% | -26.4% | 38.5% | 79.59% |
3 Yr | -4.1%* | -29.6% | 52.0% | 46.75% |
5 Yr | -3.9%* | -33.0% | 29.9% | 53.41% |
10 Yr | N/A* | -27.0% | 16.1% | N/A |
* Annualized
Total Return Ranking - Calendar
Period | FKLRX Return | Category Return Low | Category Return High | Rank in Category (%) |
---|---|---|---|---|
2023 | -13.8% | -31.8% | 18.4% | 60.53% |
2022 | -0.2% | -14.3% | 103.5% | 30.58% |
2021 | 0.8% | -20.2% | 60.6% | 43.21% |
2020 | 0.6% | -13.4% | 10.9% | 77.34% |
2019 | -0.5% | -12.3% | 4.7% | 42.19% |
NAV & Total Return History
FKLRX - Holdings
Concentration Analysis
FKLRX | Category Low | Category High | FKLRX % Rank | |
---|---|---|---|---|
Net Assets | 87.1 M | 100 | 124 B | 85.16% |
Number of Holdings | 557 | 2 | 8175 | 45.78% |
Net Assets in Top 10 | 31.3 M | -1.57 B | 20.5 B | 70.26% |
Weighting of Top 10 | 34.81% | 4.3% | 100.0% | 38.61% |
Top 10 Holdings
- Fidelity® Inv MM Fds Government I 17.64%
- Thunderbolt II Aircraft Lease Ltd / Thunderbolt II Aircraft Lease US LLC 4. 2.35%
- Federal Home Loan Mortgage Corporation 12.4179% 2.31%
- S-JETS 2017-1 Ltd 3.967% 2.18%
- Federal Home Loan Mortgage Corporation 3.79% 2.17%
- NYC COMMERCIAL MORTGAGE TRUST 3.31% 2.13%
- BBCMS MORTGAGE TRUST 3.404% 2.10%
- Wfrbs Coml Mtg Tr 4.0472% 2.00%
- CSMC 2021-980M 3.535% 1.90%
- Citigroup Commercial Mortgage Trust 3.172% 1.79%
Asset Allocation
Weighting | Return Low | Return High | FKLRX % Rank | |
---|---|---|---|---|
Bonds | 71.21% | -150.81% | 188.92% | 76.90% |
Cash | 21.04% | -261.12% | 258.91% | 20.47% |
Stocks | 4.95% | -38.22% | 261.12% | 11.62% |
Convertible Bonds | 2.56% | 0.00% | 33.50% | 33.06% |
Preferred Stocks | 0.20% | 0.00% | 31.88% | 40.53% |
Other | 0.04% | -25.82% | 276.99% | 26.83% |
Stock Sector Breakdown
Weighting | Return Low | Return High | FKLRX % Rank | |
---|---|---|---|---|
Utilities | 0.00% | 0.00% | 100.00% | 12.81% |
Technology | 0.00% | 0.00% | 33.40% | 35.51% |
Real Estate | 0.00% | 0.00% | 100.00% | 23.37% |
Industrials | 0.00% | 0.00% | 100.00% | 85.84% |
Healthcare | 0.00% | 0.00% | 100.00% | 24.04% |
Financial Services | 0.00% | 0.00% | 100.00% | 12.58% |
Energy | 0.00% | 0.00% | 100.00% | 91.69% |
Communication Services | 0.00% | 0.00% | 100.00% | 30.56% |
Consumer Defense | 0.00% | 0.00% | 99.97% | 80.67% |
Consumer Cyclical | 0.00% | 0.00% | 89.95% | 26.52% |
Basic Materials | 0.00% | 0.00% | 100.00% | 80.45% |
Stock Geographic Breakdown
Weighting | Return Low | Return High | FKLRX % Rank | |
---|---|---|---|---|
US | 4.05% | -40.06% | 261.12% | 10.79% |
Non US | 0.90% | -6.04% | 17.73% | 7.75% |
Bond Sector Breakdown
Weighting | Return Low | Return High | FKLRX % Rank | |
---|---|---|---|---|
Securitized | 35.65% | 0.00% | 99.65% | 25.14% |
Corporate | 31.08% | 0.00% | 100.00% | 56.53% |
Cash & Equivalents | 21.14% | 0.00% | 100.00% | 22.50% |
Government | 11.99% | 0.00% | 99.43% | 47.08% |
Derivative | 0.09% | 0.00% | 72.98% | 53.33% |
Municipal | 0.05% | 0.00% | 54.26% | 34.86% |
Bond Geographic Breakdown
Weighting | Return Low | Return High | FKLRX % Rank | |
---|---|---|---|---|
US | 52.42% | -151.11% | 194.51% | 71.92% |
Non US | 18.79% | -136.75% | 90.11% | 45.78% |
FKLRX - Expenses
Operational Fees
FKLRX Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Expense Ratio | 2.48% | 0.01% | 6.46% | 8.06% |
Management Fee | 1.50% | 0.00% | 2.29% | 93.94% |
12b-1 Fee | 0.50% | 0.00% | 1.00% | 65.58% |
Administrative Fee | 0.15% | 0.00% | 0.70% | 71.74% |
Sales Fees
FKLRX Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Front Load | N/A | 0.00% | 5.75% | N/A |
Deferred Load | N/A | 1.00% | 5.00% | N/A |
Trading Fees
FKLRX Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Max Redemption Fee | N/A | 0.50% | 2.00% | N/A |
Related Fees
Turnover provides investors a proxy for the trading fees incurred by mutual fund managers who frequently adjust position allocations. Higher turnover means higher trading fees.
FKLRX Fees (% of AUM) | Category Return Low | Category Return High | Rank in Category (%) | |
---|---|---|---|---|
Turnover | 194.81% | 0.00% | 496.00% | 88.44% |
FKLRX - Distributions
Dividend Yield Analysis
FKLRX | Category Low | Category High | FKLRX % Rank | |
---|---|---|---|---|
Dividend Yield | 1.67% | 0.00% | 17.29% | 82.75% |
Dividend Distribution Analysis
FKLRX | Category Low | Category High | Category Mod | |
---|---|---|---|---|
Dividend Distribution Frequency | Annually | Monthly | Monthly | Monthly |
Net Income Ratio Analysis
FKLRX | Category Low | Category High | FKLRX % Rank | |
---|---|---|---|---|
Net Income Ratio | 2.31% | -1.55% | 11.51% | 71.45% |
Capital Gain Distribution Analysis
FKLRX | Category Low | Category High | Capital Mode | |
---|---|---|---|---|
Capital Gain Distribution Frequency | Annually | Annually | Annually | Annually |
Distributions History
Date | Amount | Type |
---|---|---|
Jun 29, 2022 | $0.099 | OrdinaryDividend |
Dec 31, 2018 | $0.279 | OrdinaryDividend |
Dec 29, 2017 | $0.166 | OrdinaryDividend |
Dec 30, 2016 | $0.316 | OrdinaryDividend |
FKLRX - Fund Manager Analysis
Managers
Robert Christian
Start Date
Tenure
Tenure Rank
Sep 28, 2015
6.68
6.7%
Robert Christian is a senior managing director and Head of Investment Research. He joined K2 Advisors in May 2010.From 1990 to 1995 Mr. Christian worked as a global strategist and proprietary trader at Chase Manhattan Futures Corporation. In 1995, he founded Modoc Capital focusing on short-term futures trading. In 1997 Modoc entered into a joint venture with Stonebrook Capital Management LLC as a portfolio manager and researcher. From 1998 to 2003 Mr. Christian worked at Graham Capital Management LP as a portfolio manager and researcher of quantitative based trading strategies.
Brooks Ritchey
Start Date
Tenure
Tenure Rank
Oct 01, 2019
2.67
2.7%
Brooks Ritchey is a senior managing director and head of portfolio construction for K2 Advisors. In this role, he manages absolute return, multi-asset, and risk overlay portfolios. He is member of the alternatives executive committee, Japan investment committee, and K2 Advisors guideline committee. Since 1987, Mr. Ritchey has managed multi-asset mutual fund and hedge fund portfolios while located in New York and Paris, France during his employment with organizations including Steinhardt Partners, Citibank, Finch Asset Management, Paribas, AIG, and ING. Mr. Ritchey joined K2 Advisors in 2005.
Art Vinokur
Start Date
Tenure
Tenure Rank
Oct 01, 2019
2.67
2.7%
Tenure Analysis
Category Low | Category High | Category Average | Category Mode |
---|---|---|---|
0.08 | 28.19 | 5.64 | 3.19 |