31.91 -0.07 (-0.22%) Buy

BEN investors re-evaluating their investment strategy

13 min read

FRANKLIN RESOURCES INC is a falling knife that can bleed you if you catch it today. It delivered -0.22% to close at 31.91. During the last week it delivered -1.02% and saw a maximum drawdown of -2.17% before bouncing back.

[Themes containing BEN]

BEN is currently in a bullish trend. The current bullish signal has generated a profit of +1.24% for BEN's investors in the last three months.


BEN has been outperforming the SP500 index in recent time. It showed significant underperformance (compared to the SP500 index) from 20 Apr, 2016 to 3 Oct, 2018. Over the last 2 years 11 months and 9 days, BEN underperformed the SP500 index on 50% days. Which indicates that on days BEN underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months BEN delivered losses on 53% days. However, it still managed to end this period in a profit. It's best return during this period (of +4.56%) was on Tuesday, 30 Oct, 2018. While it's worst loss in the same period (of -2.92%) was on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 6 losing days, which started on 21 Sep, 2018 and ended on 28 Sep, 2018. This bearish trend lost -7.86% of investor capital.

The last 12 months saw BEN's investors making profits in 4 months and incurring losses in 8 months. BEN was less consistent in delivering monthly returs than SP500 index. BEN significantly outperformed SP500 index in Nov 2018, when it returned +11.11% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. BEN had a longer winning streak of losing months than SP500 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -21.08%. It is interesting to note that both BEN and SP500 index significantly outperform during months when quarterly/annual results are announced.

"I do not regard a broker as a member of the human race.

BEN is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in BEN's volatility from 17 Sep, 2018 to 30 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that BEN has significant positive skewness in it's return distribution. This indicates that investors can expect BEN to recover from drawdowns quickly. Which makes BEN a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

SP500 index has more chance of extreme outcomes than BEN. Therefore, SP500 must receive a lower allocation than BEN in your portfolio. SP500 index usually has shorter drawdown period than BEN.

On a general note (since you are interested in BEN), two instruments that deserve special mention are ECYT and NFEC. They have significantly outperformed the overall market this year.

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