From the September 2006 issue of Investment Advisor • Subscribe!

September 1, 2006

INCOME & growth

An extended version of the Mutual Fund Spotlight article appearing in the Investment Advisor September 2006 print edition.

When a client's primary goal is income from their portfolio, there are a number of options to choose from: dividends are popular because of the favorable tax treatment that many now enjoy, but with interest rates creeping up from what were historically low levels there may be opportunities there, too. And what of capital growth? Does an income-producing portfolio have to rule out capital growth? Not necessarily, says Edward Perks, senior vice president of San Mateo, California-based Franklin Advisors, and co-lead portfolio manager of the $25.2 billion Franklin Income Fund (FKINX): "I jokingly say they should think about it as 'INCOME' in capital letters, and 'growth' in lower case letters. I think it's one of the things that really differentiates our style and our approach."

Under the leadership of Perks and Charles B. Johnson, chairman of Franklin Resources and manager of this fund since 1957, the fund has achieved a consistent and impressive record, receiving Standard & Poor's highest ranking of five stars overall and in the one-, three-, five- and 10-year periods. As of July 31, the fund had 10-year annualized total returns of 9.54% versus 5.45% for its Hybrid U.S. Income peer group; and five-year annualized total returns of 10.07% versus 3.67% for its peer group. If one had invested $10,000 in this fund on its August 31, 1948 inception date, and had reinvested all capital gain and dividend distributions, as of June 30 that holding would hypothetically be worth $4,011,723.

I saw that you have a new Balanced Fund as well as the Income Fund?

Yes, we very recently launched, on July 3rd.

Congratulations... how is the new Balanced Fund different from the Income Fund?

I think there are obvious differences between the Income Fund and our new Balanced Fund, and in many ways our clients have viewed the Income Fund as a very balanced type fund, because it's had a very consistent commitment to using a wide range of asset classes. I think the opportunity that the new Balanced Fund offers is that it's more traditional, a defined mix of equities and fixed income. In most market conditions we'll maintain a 60/40 split, equity/fixed income. Clearly, the Income Fund is very income-oriented in that it pays a high current monthly distribution, and is very much managed to maintain that attractive distribution for shareholders and a very consistent distribution over time. That's certainly one of the hallmarks of the Franklin Income Fund, that it's paid uninterrupted dividends for its entire history, and in fact, when you look at it relative to its peers, it maintains a very high level of income.

Which is very important today, of course...

Yes, [over] the last five years, once we went through the boom and bust of technology and growth, investors did turn a lot of their attention toward this type of product, for the benefits of the diversification, as well as for the capture of near-term total returns. I think there are a lot of ways you can look at how investor preferences have changed and certainly overlaying it from a much longer-term standpoint, demographics, as baby boomers in particular are getting more focused on stability of their principal and yet still wanting some kind of play on growth. When I tell people about the Franklin Income Fund, when you look at our objective it is certainly income-oriented, but all of our investment selection and the active management of the fund is geared to also maintain prospects for capital appreciation. Certainly if you look at the prospectus it is defined as part of the objectives so, whether it's bond investments, or convertible securities, or common stocks, that combination of delivering an attractive, reliable income stream, yet also having a view, over time, for possible appreciation is something that we very much use in our portfolio management process.

And of course that fits right in with the goal of many baby boomers-to fund a (potentially) much longer retirement situation?

Yes, it's certainly good that a lot of investors are thinking more along those lines, and hopefully those lessons learned, albeit very painful for some, I think it's important for people to have a longer-term view of how to manage their investments, and we think that's where the advisor plays a really critical role. When you think about the cycle we went through, you've heard the anecdotes investment managers talk about: being at cocktail parties [where] the conversation was, everybody was a do-it-yourself [investor]; that was a very dangerous thing as well. The value-add of the investment advisor is something that we certainly believe in.

How much money do you manage in the Income Fund portfolio overall?

The Franklin Income Fund is up to about $44 billion. We have a total of five income-related funds that I lead-manage, and the total is about $49 billion; there are three Franklin portfolios, and two sub-advised portfolios. My lead management roles are limited to the Franklin Income Fund strategies as well as the new Franklin Balanced Fund. I also oversee they hybrid group within the Franklin Equity Group, given the hybrid nature of these products, which also includes our Convertible Securities Fund, which is a little over $900 million. We've had a very longstanding commitment to investing in convertibles-we think our system here, where we have in-house equity and credit research, is very well suited to the convertible market, given that those securities do combine components of both equity and fixed-income. If you look at our track record on a long-term basis, three-, five-, and 10-years, we think we've done a very good job managing convertibles. Also the Equity Income Funds, which are certainly similar to the Income Fund strategy but really more focused on equity-only investments. Both of those portfolios, the Convertible Securities Fund and the Equity Income Fund, are lead-managed By Alan Muschott, who I work very closely with as well as the manager of our Utilities Fund, who is John Kohli, and I think we also have a very long term track record managing a utility-only portfolio. That's our core group of investment professionals; [we] work very closely together, and I think there are a lot of synergies that we can get from understanding what one another is thinking, and bouncing ideas off of one another for different portfolios, but my lead managed role is really the Income Fund and the new Balanced Fund.

What makes the Income Fund different from its peers?

The primary difference is the commitment that we've had to maintaining stable, attractive income. If you look at the Income Fund's distribution, it's monthly; it's consistently in the top decile of its peer group from a distribution standpoint. We also really seek to maintain stable distribution and that's reflected in a lot of ways. Despite a significant amount of interest rate volatility over the last 10 years, the Income Fund's distribution has changed only three times. Granted, we've been in a kind of declining interest rate environment until recently, so the pressure has been downward on our distributions, but throughout all those market conditions we did make an effort to really maintain consistency in our distribution, which we think a lot of our investors have really come to appreciate from the Franklin Income Fund. I think that's really a very significant differentiator.

When you look at the portfolio, the fact that we've grown up, if you will, in San Mateo, out here at the company's headquarters, having a really strong core group of equity research analysts and a strong core group of credit analysts that in many ways can leverage off one another-I think that's a real competitive strength that we have in managing a fund like this. In many instances other organizations approach this type of product somewhat independently, meaning the fixed income portion would be managed here, and the equity portion would be managed somewhere else. Our analysts are really intermixed, I mean you walk around our building here, and one office or cubicle might be an equity analyst, and right next to it is a fixed-income analyst. When we're meeting with companies, when we're doing in-depth research on either an industry level or an individual company level there will be cross-participation. It adds a lot of value-certainly to the Income Funds-but I think more broadly to the effort out here not only for the Franklin Equity Group, but also the Franklin-Templeton Fixed Income Group which we're pretty integrated with.

Would you tell me about your investment process?

It's highly flexible and that's the real key to our historical success-that we have a significant amount of resources that we can deploy to look across a very wide range of asset classes: on the equity side, predominantly dividend-paying common stocks, but also the ability to actively participate and look at the convertible securities market, leveraging off of our expertise in that area; on the fixed-income side, everything from government, and agency, and mortgage-backed securities where we have a very strong, dedicated group, all the way into the credit universe from investment grade corporate credit down into non-investment grade corporate credit. The process is really to be very open-minded. We don't manage from a top-down basis running screens looking for things; we really try to leverage the research, and leverage what the investment professionals in their unique areas are doing. Then it's my job to evaluate the relative attractiveness of one opportunity to another in helping us meet the objectives. So [the process] is highly flexible and well-suited to leverage or take advantage of the organization here.

How do you select securities once you hear from the analysts who look at everything?

It depends on the product area we're talking about. On the equity side, generally, how we get to the point of making an investment is doing our own independent research utilizing, certainly, information that we can get out of management at the company as well as other sources, [including] sell-side research. But our internal analysts do maintain models and are responsible for following companies within given industries, so we attempt to leverage that, and that will help us determine at what level we find a stock attractive and suitable for the portfolio, and similarly, at what point a certain company may have reached our price target and warrants reducing or eliminating the position. So it's a very dynamic, kind of ongoing process, very based on fundamental analysis, on the equity side.

On the credit side it's a very similar story, when you're talking about corporate bonds, particularly non-investment grade corporate bonds where our credit research analysts are very actively maintaining a view on the company's credit profile. We'll use that as part of the information to evaluate how attractive that opportunity is in the overall fixed-income market. That's something that we also do on a very active, very bottoms-up oriented nature. The other parts of the fixed-income market, certainly, your overall view on the economy and interest rates becomes a much greater factor in evaluating the investment opportunity. That's something where we can, through our integration with the Franklin Templeton Fixed Income Group, participate in our bi-weekly global economic outlook meetings, and our bi-weekly fixed-income sector allocation meetings. It's a very collaborative process, really, on all fronts, whether it's management of the common stocks, the equity portion of the portfolio, interaction and collaboration with our research analysts, as well as on the fixed-income side in a lot of different ways.

In terms of fixed income, will the return of the 30-year Treasury have an effect on the portfolio?

It's a little bit of a non-event; to the extent that they bring it back and it increases supply, and potentially moves interest rates up a little bit-certainly that kind of action can have an impact on a portfolio. In general, the way we've been positioned-the income fund portfolio's changed over the last year; it's changed fairly significantly and normally we don't have these kind of changes, so it's kind of a timely conversation, but in general I've been about the happiest guy in the building to see interest rates moving up.

I'll bet you have!

It was just a very difficult environment a year ago-we were flirting with below 4% yields on the 10-year Treasury; we had generally had a very strong period in corporate credit, meaning credit spreads in the corporate universe had tightened significantly, and we were somewhat idea-constrained. Actually, if you look at June 30, 2005, we had about 8% cash, which is a pretty high cash balance for us. Fast forward to today, we're down, generally, in the 1.5% range on cash, we've had much better opportunities with the back-up in Treasurys, and a little bit of volatility in corporate credit spreads. We think fixed income has become, overall, much more attractive. To the extent that you have dynamics like that playing out in the Treasury market, we then can take advantage of that, in one way or another. We'll certainly talk to all of the investment professionals, like we're doing on an ongoing basis, and evaluate whether or not mortgage-backed securities are now more attractive given the profile of what's happening in the Treasury market. There's a lot of interaction there to help us evaluate what the best longer-term opportunities are.

Then the new 30-year acts with everything else that's been going on in the past year to shake loose a bit more opportunity for you?

Yes, I think so. Earlier this year we were-everybody was-somewhat surprised at how well that initial auction of the 30-year went [the initial Treasury 4.5% of 2/15/2036]. There was a lot of demand, obviously, when we initially saw the 30-year come back. That bond-it's interesting to note when it was issued, February, I believe, it's is now trading at about a $92 _, because of the backup in rates. It shows you the power of interest-rate moves on long-duration fixed income (chuckling).

So you've had more opportunity to pick and choose?

Yes, I mentioned the cash position but if you look at how the portfolio's changed, a year ago, so June 30, 2005, we were very equity-tilted, and when I talk about equity or stocks in the portfolio I'm really talking about common stocks, convertible preferred stocks, and any straight preferreds that we may own-we were up at close to 53% of the portfolio. The flip side of that-the bond side-we were very idea-constrained, and having a difficult time justifying the exposure, certainly our view was somewhat negative on interest rates particularly when we were down below 4% on the 10-year. We felt like we had pretty much one way to go from there, and we don't spend a lot of time trying to pick [or] point to when things will happen; rather, get the overall trend and direction correct over the longer term and have the portfolio positioned in the right way. We'd gotten down below 40%, [to] 39.2% in total fixed income, and within that virtually all of our exposure was geared towards corporate debt. We had about 4% in mortgage-backeds, so we were very credit-oriented, where we thought the primary driver of the investments' performance over time would be the fundamental improvement in the business, and interest-rate moves would take somewhat of a backseat as opposed to Treasurys, or Agencies, or mortgages, where the Treasury move is really the primary factor. And cash, as I said, was close to 8%, so that was a pretty uniquely positioned fund, very dictated by and driven by the state of the overall market.

Fast-forward a year to June 30, 2006, we're actually much more balanced, and in fact, we've actually flipped to the point where bonds actually exceed our stocks. Our [allocation to] stocks [has] declined about five percentage points down to just below 47%, bonds are just below 52%, and the cash is at 1.7%, so [that's] quite a swing. So, as interest rates [rose], particularly since we went from 4% earlier this year to around 5_% on the 10-year [Treasury]-also in that environment there was a decent amount of spread movement on the credit side-that definitely presented some interesting opportunities for us.

How has the volatility in oil stocks and oil prices affected the portfolio?

Not that significantly, certainly it will impact our unique holdings in that sector, but we've generally had a somewhat lighter allocation to the oil and gas sector. We've been roughly flat in our holdings in the last year and we've seen some appreciation above other parts of the portfolio, so it's increased a little bit but we're down near 6% of the portfolio as of June 30, 2006, in oil and gas names. Most of that is in the major integrateds where there is a more attractive dividend yield, and a little bit more muted play on the commodity price as opposed to a very small, purely focused producer of oil and gas, or an oil field service company where swings in the commodity price can have a more significant effect on the shares' value. That said, earlier this year we did have an opportunity, particularly on the fixed income side of the portfolio, to add debt securities in the exploration and production universe: companies like Newfield Exploration [Company] (NFX), Chesapeake Energy [Corp] (CHK), Pogo Producing (PPP). It certainly was an opportunity where we thought with that back-up in interest rates and with that increase credit spreads, that there was an attractive opportunity to buy bonds in companies that we think have good long-term prospects at relatively attractive yields for the portfolio.

Can you talk about some of your largest holdings?

Yes. I mentioned Chesapeake Energy, it is one of our larger positions that we've added recently, meaning in the last year when I talk about recently-I generally have a little bit longer time period. [What] makes Chesapeake an interesting company for us to talk about is because it really is an opportunity to talk about how we can take advantage of having this flexible approach, meaning, looking across an entire capital structure for either the unique investment that makes sense or the combination of investments in a given company that make the most sense.

Many of the companies, particularly larger-capitalization companies, might have corporate debt; might have convertible securities, both preferred stocks and convertible corporate debt as well as the common stock, and if it pays a dividend that's something that we can consider. We generally will not invest in securities that do not generate income for the portfolio. Chesapeake's a good example: It's a company that's been very focused on building a very core, strategic, strong asset base in North America that's focused on natural gas, and we think that that, over the long term, is a very good place to be positioned. We think the company has done a very good job leveraging the scale that they've been able to build across different regions of the country. Ultimately, we viewed the opportunity to buy not only some of their corporate debt securities, but also some convertible preferred positions, that that offered a really compelling and interesting blend for the portfolio, enabling us to lock in very attractive income stream; but also through the convertible nature of the preferred stocks, long term appreciation in the common stock is certainly something we think we can benefit from as well. So it's a good example of the fund's flexibility using our research approach that's driven both by equity and credit research, and identifying what we think is an attractive opportunity well aligned with the fund's investment objective.

Any others?

Yes. In the energy sector that's probably the one where we have multiple parts of the capital structure; the other holdings that have done well include Chevron Corp. (CVX) as well as the Canadian Oil Sands [Toronto Stock Exchange] (COS.UN), which has actually been a very long-term holding. Clearly, when we approach our investment in a sector like energy, we're looking not only at the near-term attractiveness of the security, meaning its income stream and the company's position in the near term, but also, [with] something like the Canadian Oil Sands, which we've been a long-term investor in, we view it as a really critical long-term resource in North America of oil, hydrocarbons, and that's something that also warrants a very long-term kind of orientation and position in the security. We're very focused on the longer-term, secular case for energy, knowing that in any short-term period there can be more cyclical-oriented swings. That's probably one of the bigger challenges, particularly with the oil and gas sector where you have these major, global political developments that can swing markets around pretty significantly. I think it's very debatable right now how much of a political premium there is in the commodity markets.

How have the emerging markets gyrations this spring affected that point of view?

I don't think we experienced it as much in the energy patch as we did in some of the metals like copper, where you clearly have a very significant influence, driven predominantly by demand growth in China, but also other parts of the emerging markets. I think that a lot of money, maybe, was flowing into that sector at the wrong time and then we got a taste of the volatility of things that are driven by those markets, so I think that was somewhat of a healthy thing for that market to go through. We did have some positions in the metals; we did actually earlier this year exit some of the positions given the very significant run-up that we had. One of the more telling tales was when our analyst in the sector started talking about saving your pennies because you could melt them down and sell the copper back for more than [the pennies were] worth (laughs). When I heard that I thought it was time to think about selling our copper exposure. There are still opportunities that we'll look at on a longer-term basis; at times you certainly have to be aware of the market becoming significantly overheated in certain areas, and that's something we'll try to react to, but we're really driven by the intermediate- to longer-term opportunity.

That income focus, having confidence that our investment can provide attractive income in the near-term, takes the pressure off defining when the catalyst might present itself for appreciation. That's something that other-particularly non-income oriented investors-have to be far more focused on, defining when the catalyst is: 'Is this the last bad quarter? Will things start to improve next quarter? Can the stock start to work by the end of the year?' That kind of conversation-that's really eliminated from our process.

Because it's already working-producing the income?

Yes. As long as we're comfortable with that income stream being reliable, we can really move that other part of the conversation out to: 'Is there value here and over time do we think that value can be realized?' It really opens up a lot more opportunities and it's a healthier way of looking at investing than this shorter-term oriented approach, which I think is good and bad. Clearly, different portfolios have different objectives, and are held to different standards, but I think as an income fund investor, and as the manager of the Franklin Income Fund, that's something that I appreciate much more about my role really being more long-term oriented, because I can be, because I have the income coming from the investments today.

Are you managing taxes on that income stream (for your investors)?

Yes, it's very much part of it and we do, particularly with the change in tax law a couple of years ago on common stock dividends. It's something that we seek to protect and pass along to our investors-the lower tax on common stock dividends. There is a lot of income management as part of the fund's portfolio management. We have an extensive staff of fund accountants and tax managers that help me do that because it can be pretty complex at times, particularly with our strategy, [and] our investors appreciate a smooth or consistent profile to their income stream. Certainly with the variability in when your common stock or preferred stock dividends get paid-more like quarterly as opposed to daily interest accrual-it makes your income stream a little bit lumpier, so we work quite actively with our group to forecast what our income will be on a forward six-to 12-month basis. [It] is a pretty significant undertaking, but we've been doing it for a long time, and I think our process is pretty well-established, and it's been very effective. We certainly keep track of all of those consequences for our different shareholders.

Is there a holding that just didn't work out the way you wanted?

Yes. More recently, we've been lucky to have a lot of the portfolio firing on all cylinders, if you will. Back towards the end of 2005 we had some NAV volatility, we had some investments in the fourth quarter in particular [when] we had a bit of a shift out of value into growth; value stocks in many of our sectors underperformed, energy was under pressure post the spike caused by the hurricane, so [it] actually underperformed pretty significantly on October and November.

Then on the corporate bond side we did have a significant position in the debt securities of Calpine Corp., which unfortunately at the end of the year did file for bankruptcy protection, seeking to reorganize, and we were a large bondholder there. That certainly was a disappointment because the income stream does stop coming into the portfolio.

Our approach, not only as it related to Calpine, but also more broadly our approach in non-investment grade corporate bonds is to really try to focus on companies that we think have a strong underlying asset value. Oftentimes these companies do have levered balance sheets, and we do have to watch their credit profile. What happened with Calpine was, ultimately, the significant spike that we saw with natural gas-the company does have a portfolio of electric generation assets that are primarily fueled by natural gas-and as natural gas spiked all the way up to $14/MMBTU, I think it was (the high after the hurricanes hit), the economics of electricity generation from natural gas really were quite distorted.

The company at that point decided to look at their liquidity, and look at their overall capital structure, and seek to make changes. That did pressure the portfolio quite significantly last year, but as we look through, we're not immediately forced to sell our position; at that point we can look for an opportunity to recover value, and certainly not necessarily fire-sale securities whether it's a stock that stops paying a dividend or a bond that does default and stops paying us interest. Subsequent to them filing for bankruptcy and the securities being under a lot of pressure there has actually been very significant appreciation, and a recovery of a lot of that value.

Two weeks ago [as of August 4th] it was 110 degrees every day [in San Mateo, California, just outside of San Francisco]. It was unbelievable, and it's just moved its way across the entire country. We had Stage Two power alerts for a couple of days in California, and there's been tremendous electricity-demand growth, year-over-year on a peak-demand basis, which is what regulators really look at from the standpoint of maintaining reserve margins. And natural gas prices have become more normalized from the $14 they achieved after the hurricanes down to the $6-$7 range they've been in more recently, so that's improved the outlook for natural gas-fired generation. There's been a lot more interest industry-wide in those types of assets, and that certainly has enabled a lot of our bond positions to recover a lot of value. When we're investing in non-investment grade corporate credit, we understand we're taking credit risk. We approach the market in a way that helps to mitigate that credit risk, meaning focusing on those strong underlying assets, because if there is a credit event, over time the real value of those assets should help bondholders recover a significant amount of their value.

So you can be patient while this recovery takes place?

Yes. Still, we'll continually manage and look at the position to evaluate whether or not this is an opportune time to start reducing the position and looking for income-oriented investments more in line with the objective. I think it's a flexible approach that can let us look at the ultimate recovery potential and whether or not that makes the most [sense] for our investors-to continue to stick with the investment.

Do you have a sell discipline that you employ across all these flexible asset classes?

Yes. Clearly the area that its most easily defined from the standpoint of a sell discipline is price targets, which we maintain not only on the stocks but also on the credits, i.e. a certain spread where we think the credit is fairly, or fully valued-or overvalued at that point. That's how we manage the process, so for each investment that we're making we have an eye to using the research that's being done on the equity and credit sides, as to what this investment is capable of doing over the longer term. Additionally, the challenge that we have, and that each of our investments has, is that there's always another type of investment that we can make to replace an existing investment, so it's that challenge-that each investment be looked at on a relative basis to other opportunities. We do seek to have broad diversification across asset classes, but that's pretty broadly defined and there's not a more strict kind of balance or a targeted allocation between asset classes.

One example would be: a year ago we were very equity tilted, generally the stocks in the portfolio had been performing very well relative to the opportunities that we saw in bonds. As bonds moved up in yield, just with the general rise in interest rates, they became more attractive but we also had some profit-taking opportunities on the equity side of the portfolio where we felt like our target price had been met, the yield had declined somewhat-obviously as the stock [prices] rise the dividend yields decline unless the company is aggressively growing their dividend-so we did take some profits for lower-yielding equities, and we thought that on a relative basis it made more sense for the portfolio to start looking more aggressively for fixed-income opportunities. It's a very unique process, it's not simply it's met our target price and we're selling-it's more dynamic than that.

A lot of moving parts?

Yes.

Where would this fund fit in an individual's portfolio?

The thing that I've come to appreciate the most is that each client of each investment advisor I've talked to is so unique that the decision has to be made on a client-by-client basis. In general, when you look at the type of fund that [this] fund is, its track record historically, and its very broad diversification, it probably deserves a look [as being] the core foundation of a lot of clients' portfolios; from there it's something that many clients can build upon and add other profile investments to, to round out their portfolio. If you believe in the investment pyramid type approach, something like the Income Fund, with a broad mix of fixed income and equity securities is something that is more suited to be a core part or base part of a portfolio.

What else do advisors need to know about the fund?

The thing that we'd like to emphasize is the diversification of the portfolio, the flexible approach, and the consistency with which we've followed it. Charlie Johnson is still an active member of the portfolio management team; the fact that he's been looking over the Income Fund since 1957 does add a tremendous amount of consistency to our approach. I joined Charlie in 2002, so for the past four-and-a-half years or so, I've been much more active on the day-to-day management of the portfolio, but everything is done with Charlie's involvement and with his oversight. That combination-where I can take advantage of his tremendous knowledge base of not only markets, but also how the Income Fund has fared in different markets, to really think about how the portfolio should be positioned and the type of investments in each market that we should be pursuing-is really something that is unique in the industry and amongst our peers, and something that hopefully we can continue to deliver attractive results for our investors.

With a portfolio that's as giant as this one, is there any talk about closing the Income Fund?

It's something that we will continue to look at; the one thing that we really have in our favor is the diversification. In a way it's a lot of smaller portfolios wrapped up in one. If you are managing a portfolio this size and you're focused on one part of the market I think your constraints and your issues are going to be much greater. The thing that we're looking at most closely is that, [and] our ability to continue to operate in the way we have historically-we do feel very good about that; and certainly from a performance standpoint we'll continue to look at how we're doing relative to our peers. We'll continue to evaluate that on an ongoing basis. I think Franklin Templeton, as a whole, has a good track record there, has closed funds in the past, and certainly it's part of the process that we've used in managing our products, not only for the Income Fund, but also as a firm.

Do you own the fund in your own portfolio?

Yes, actually outside of my house (I live in California) it's my largest investment. From a financial standpoint it's a significant holding.

What do you do when you're not managing the fund-do you have hobbies?

I have two little boys, 4 and 2! They're a lot of fun. I enjoy cycling, an occasional round of golf, and family.

Staff editor Kathleen M. McBride can be reached at kmcbride@investmentadvisor.com.

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