Franklin Mutual US Value N acc USD |
Morningstar's Take
|12/03/2025by Greg Carlson
| The different regional vehicles of Franklin Mutual Shares’ strategy are more volatile than they used to be, and a team that was revamped in 2020 lacks a clear edge. The team that supports this fund has seen substantial changes in recent years. In late 2020, CEO and CIO Peter Langerman, a longtime manager of this fund, announced his retirement. Three other veteran portfolio managers from the broader team then left, including David Segal, another veteran manager of this fund. Grace Hoefig, the firm’s then-new director of research—a role she’s giving up at the end of March 2025—joined the fund in late 2020 along with Christian Correa, who also became president and CIO. Deborah Turner, a longtime assistant portfolio manager, was removed from the roster at the end of 2022 but still serves as an analyst. Experienced manager and analyst Katrina Dudley left the team at the end of February 2024 for another role at Franklin. The strategy is about to gain an additional manager: Aman Gupta, a comanager at sibling strategy Franklin Mutual Beacon since 2014, will join this strategy at the end of March. Most of the stocks in Beacon are also owned by this strategy. Five analysts have been hired to take over the coverage of the departing members. Most are significantly less experienced than their predecessors, but each has evolved into a contributor to the team’s four largest strategies—including this one. However, the revamped team hasn’t executed consistently as yet; most of its strategies, including this one, have since generated mixed results. It's also not clear that the strategy will provide the same downside protection going forward that it once did. The portfolio has gradually become more compact—US fund Franklin Mutual Shares recently held 51 stocks, compared with 90-plus in 2018, and Luxembourg-domiciled portfolio Franklin Mutual US Value held just 51 because it adopted a virtually all-US focus in 2016. In addition, both portfolios are less likely to build cash than they once were when the managers didn’t find enough stocks that met their valuation standards, as the team is wary of cash's performance drag in strong markets. As a result, both vehicles’ volatility, as measured by standard deviation, over the trailing three and five years through February 2025 were higher than their average peer and category benchmark. |
An increased focus on stock selection and a team with more to prove.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | Average |
| Parent | Average |
| Process | Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
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