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Fund Ratings

16 subfunds of Franklin Templeton Investment Funds and Franklin Templeton Strategic Allocation Funds are rated A or AA and 2 are rated AAA by Standard & Poor's. Moreover, out of the 66 subfunds that qualify for a Morningstar Fund Star, 48 subfunds were given 3 or more stars. Here is the list of the main ratings as of 30 April 2012:

Franklin Templeton Investment Funds Franklin Templeton Strategic Allocation Funds
Rated funds
Franklin Templeton Investment Funds (FTIF)Updated as of 30 April 2012
Fund rating definitions
Equity fundsStandard & Poor's RatingMorningstar Overall Ranking
Franklin Asian Flex Cap Fund 
Franklin Biotechnology Discovery Fund 
Franklin Euroland Core Fund 
Franklin European Growth FundA
Franklin European Small-Mid Cap Growth FundA
Franklin Global Growth Fund 
Franklin Global Real Estate Fund 
Franklin Global Small-Mid Cap Growth Fund 
Franklin India FundAA
Franklin MENA Fund 
Franklin Mutual Beacon FundAA
Franklin Mutual Euroland Fund 
Franklin Mutual European FundAA
Franklin Mutual Global Discovery FundA
Franklin Natural Resources Fund 
Franklin Technology Fund 
Franklin Templeton Global Equity Strategies Fund 
Franklin Templeton Global Growth and Value Fund 
Franklin Templeton Japan Fund 
Franklin U.S. Equity Fund 
Franklin U.S. Focus Fund 
Franklin U.S. Opportunities Fund 
Franklin U.S. Small-Mid Cap Growth Fund 
Franklin World Perspectives Fund 
Templeton Asian Growth FundAAA
Templeton Asian Smaller Companies Fund 
Templeton BRIC FundA
Templeton China FundAA
Templeton Eastern Europe Fund 
Templeton Emerging Markets Fund 
Templeton Emerging Markets Smaller Companies Fund 
Templeton Euroland Fund 
Templeton European Fund 
Templeton Frontier Markets Fund 
Templeton Global (Euro) FundA
Templeton Global Equity Income Fund 
Templeton Global FundA
Templeton Global Smaller Companies Fund 
Templeton Growth (Euro) Fund 
Templeton Korea Fund 
Templeton Latin America FundAA
Templeton Thailand Fund 
Balanced fundsStandard & Poor's RatingMorningstar Overall Ranking
Franklin Income Fund 
Franklin Templeton Global Fundamental Strategies Fund 
Templeton Global Balanced FundA
Templeton Global Income Fund 
Fixed Income fundsStandard & Poor's RatingMorningstar Overall Ranking
Franklin High Yield Fund 
Franklin Strategic Income Fund 
Franklin U.S. Government FundAA/V2
Franklin U.S. Low Duration Fund 
Franklin U.S. Total Return Fund 
Templeton Asian Bond Fund 
Templeton Emerging Markets Bond FundAA/V5
Templeton Euro Government Bond Fund 
Templeton Euro High Yield Fund 
Templeton European Total Return Fund 
Templeton Global Bond (Euro) FundAA/V4
Templeton Global Bond FundAAA/V5
Templeton Global High Yield Fund 
Templeton Global Total Return FundAA/V5
Liquid Reserve fundsStandard & Poor's RatingMorningstar Overall Ranking
Franklin U.S. Dollar Liquid Reserve Fund 
Templeton Euro Liquid Reserve Fund 
Franklin Templeton Strategic Allocation Funds (FTSAF)Updated as of 30 April 2012
Fund of FundStandard & Poor's RatingMorningstar Overall Ranking
Franklin Templeton Equity Selection Fund 
Franklin Templeton Strategic Balanced Fund 
Franklin Templeton Strategic Conservative Fund 
Franklin Templeton Strategic Dynamic Fund 
 
  Fund rating definitions
   
 
  S&P Grading Process

  To qualify for an interview and potential grading, a fund must have a minimum two-year performance track record (three years for funds-of-hedgefunds).
New funds, funds with less than two years' performance record and specialist funds can be analysed and included providing independent verifiable performance data is supplied.

The starting point for a grading is an initial quantitative screen based on performance data obtained from Lipper Inc or elsewhere. For long-only funds, discrete annual performance comparisons are made, as opposed to cumulative returns over a three-year period. Relative performance of funds within each sector is ranked by decile.

This quantitative screen captures approximately the top 20% of funds in each sector, depending on the size of the sector. For funds-of-hedge-funds the screen is based on the fund's risk/reward objective.

   
  Symbols and Definitions
   
  Grading bands for long-only funds
Platinum The fund demonstrates the highest standards of quality in its sector based on its investment process and management’s consistency of performance as compared to funds with similar objectives.
Gold The fund demonstrates very high standards of quality in its sector based on its investment process and management’s consistency of performance as compared to funds with similar objectives.
Silver The fund demonstrates high standards of quality in its sector based on its investment process and management’s consistency of performance as compared to funds with similar objectives.
Bronze A previously graded fund where a newly appointed fund manager or team does not yet have the required 12 months' relevant investment management experience.
   
   
  Fund-of-hedge-funds / Absolute return / Specialist fund gradings
Platinum The fund demonstrates the highest standards of quality based on its investment process, risk awareness and consistency of performance relative to its own objectives.
Gold The fund demonstrates very high standards of quality based on its investment process, risk awareness and consistency of performance relative to its own objectives.
Silver The fund demonstrates high standards of quality based on its investment process, risk awareness and consistency of performance relative to its own objectives.
Bronze A previously graded fund where a newly appointed fund manager or team does not yet have the required 12 months' relevant investment management experience.
   
   
  Grading bands for Ucits III flexible beta funds and fund-of-hedge-funds
Platinum The fund demonstrates the highest standards of quality based on its investment process, risk awareness and consistency relative to its own objectives and relative to comparable flexible beta funds.
Gold The fund demonstrates very high standards of quality based on its investment process, risk awareness and consistency relative to its own objectives and relative to comparable flexible beta funds.
Silver The fund demonstrates high standards of quality based on its investment process, risk awareness and consistency relative to its own objectives and relative to comparable flexible beta funds.
Bronze A previously graded fund where a newly appointed fund manager or team does not yet have the required 12 months' relevant investment management experience.
   
   
  Applicable to all fund types
Grading On Hold A grading is placed On Hold when a significant change occurs at the fund manager or fund management team level and S&P Capital IQ has not yet had the opportunity to evaluate the impact on the qualitative appraisal.
Grading Removed A previously rated fund is classified Grading Removed when a significant change occurs at the fund manager or fund management team level sufficient for the fund to no longer meet the standards to achieve a grading.
LTG recognition A long-term grading (LTG) denotes a fund that has achieved an S&P Capital IQ fund grading at Platinum, Gold or Silver level in each of the last five consecutive years.
   
   
  Bond gradings
V Bond fund volatility gradings of V1 to V6 reflect S&P Capital IQ’s current opinion of a fund’s sensitivity to changing market conditions. A volatility grading evaluates a fund's sensitivity to interest rate movement, credit risk, investment diversification or concentration, liquidity, leverage and other factors. For the V1 to V4 categories, risk is considered relative to a portfolio composed of government securities denominated in the base currency of the fund.
   
   
  Absolute return gradings
N The N grading is S&P Capital IQ's indication of a fund's potential capital stability in normal markets. It is a qualitative grading but is based on annualised weekly downside deviation. N1 is the most stable, and N9 the least stable grading.
   































































































 
  Morningstar Star Rankings Definition

  The Morningstar Europe Star Rating provides a ranking of the returns of comparable funds, taking into account fund costs and risk. Ratings are sector specific which means that they are not suitable when comparing funds in different sectors. The key ingredients of the Morningstar Star Rating are:

Morningstar Categories: These bring together funds that have genuinely similar investment policies, as reflected by their portfolio holdings. The relevant parameters are a fund’s investments in particular equity markets in bonds markets or in a combination of both.

Costs inputs: All annual expenses incurred by a fund are already deducted from the raw performance figures. Additionally, the Morningstar Rating systematically takes initial charges into account.

A risk-adjusted return calculation: For all rated funds, 36 months of performance data is combined with a sophisticated measure of risk to give an overall rating.
 
   
Fund Stars allocated
Sector Ranking
Top 10%
Next 22.5%
Middle 35%
Next 22.5%
Bottom 10%
   
Morningstar ratings are applied at share class level, which means that each share class requires 36 monthly returns before it will be awarded a rating.
   
   
 
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