Franklin Small Cap Value Fund - FRVLX
The fund seeks long term total return by investing at least 80% of its net assets in the equity securities of smaller companies. Smaller companies are defined as companies with market capitalizations, at the time of purchase, not exceeding either the highest market capitalization in the Russell 2000 Index or the 12-month average of the highest market capitalization in the Russell 2000 Index, whichever is greater.
Rating Category: Small Value
The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.
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We are long-term, bottom-up investors looking for companies with solid operating results and trading at attractive valuations. We are bargain seekers looking for $1 worth of value for 80 cents.
We seek small-capitalization companies with the following characteristics:
- Well managed companies with strong fundamentals that are selling at bargain valuations.
- Stock prices that are low based on earnings, book value, cash flow or sales relative to the market, a company's industry or a company's earnings record.
- Recent sharp price declines but the potential for good long-term earning prospects.
- Valuable intangibles not reflected in the stock price, such as franchises, underused or understated assets or cash, or patents and trademarks.
We are buy-and-hold investors who generally seek to hold an investment for five or more years.
- Small-Cap Exposure. We aim to take advantage of the prospects particular to small-cap companies, which may not exist among larger companies.
- Broad Market Exposure. We invest in a variety of companies across multiple sectors and industries.
- Value Expertise. Investors can benefit from our veteran management team with extensive value investing experience.
What Are the Risks?
- All investments involve risks, including possible loss of principal.
- Stocks historically have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.
- Value securities may not increase in price as anticipated, or may decline further in value.
- Smaller-company stocks have historically exhibited special risks, including greater price volatility, particularly over the short term.
- Smaller companies often have relatively small revenues, limited product lines and a small market share.
- Investments in foreign securities may involve special risks including currency fluctuations and economic and political uncertainty.
- These and other risks are described more fully in the fund’s prospectus.