Top Income Investor Still Likes Equities

Ed Perks, whose Franklin Income Fund is in the top 2% of funds in its class over the past five years and the top 4% over the past ten years, according to Morningstar, is continuing to find the strongest opportunities for income in the equity market. Perks tells WealthTrack’s Consuelo Mack that over the past few years, the fund’s allocation has flipped from about 65% fixed income/35% equities to close to 65% equities and 35% fixed income. He thinks rising rates aren’t necessarily a bad thing if they occur as part of a normalization process, and he sees large dividend payers as one area that is generally attractive, though he says his fund looks at investments from a bottom-up, investment-by-investment view. He’s particularly high on certain utilities with steady cash flows, and says his fund has found more opportunities in energy, materials, and tech stocks as it has increased its equity exposure. He thinks declining growth projections and the accompanying market volatility in emerging markets made for good opportunities in materials and energy stocks.