Key Morningstar Metrics for Franklin U.S. Rising Dividends Fund
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Franklin U.S. Rising Dividends achieves its aim for dividend growth, but it lacks an edge over competitors. This strategy is also offered in the U.S. as Franklin Rising Dividends.
Two experienced managers remain here after another recent departure; Nayan Sheth will leave the firm in May 2026. Manager Amritha Kasturirangan has been a part of the Rising Dividends team since 2012 and became a named manager in 2019. Matt Quinlan also stepped into his comanager role here in 2019 and has been a part of other dividend mandates since 2011. The strategy will have had two manager departures in the past three years, with Nicholas Getaz leaving in 2024 before Sheth. The remaining managers are supported by 45 research analysts from Franklin’s evolving equity group.
The comanagers look for large-cap US companies that have historically increased and will continue to increase their dividends. By consistently targeting dividend growers and identifying the best ideas within Franklin’s fundamental equity analyst group, they believe that the portfolio can produce better risk-adjusted returns over the long term than the S&P 500. That said, a benchmark change in early 2026 to the Nasdaq US Broad Dividend Achievers Index better reflects their yield characteristics.
Four criteria narrow the investable universe to a manageable set of roughly 300 companies. This includes the historical track record of firms’ dividend growth, the rate of growth, a company’s payout ratio, and leverage. (There are exceptions for utilities, where higher leverage and lower growth are common.) From there, the managers consult with Franklin’s equity analysts to better understand their forward outlook on potential names. Changes in the portfolio are collaborative, and weights stem from conviction level.
The result is a compact, low-turnover portfolio with modest income characteristics. US-based Franklin Rising Dividends held 57 stocks as of February 2026, much less than the 247 stocks for the typical active large-blend Morningstar Category peer. Based on those holdings, the portfolio had a forward 12-month dividend yield of 1.5%, which was 0.3 percentage points more than the average active category peer. Portfolio turnover in 2025 was 8.2%, which was less than 89.0% of active peers. All three traits are consistent with the fund’s historical characteristics.
The consistent and exclusive targeting of dividend growers is an awkward fit in the large-blend category; mega-cap growth stocks have dominated returns lately and don’t fit here. The US-based Franklin Rising Dividends Advisor Class returned 11.2% annualized over the past 10 years ending March 2026, which was 0.6 percentage points less than the category average. Against the more comparable Nasdaq US Broad Dividend Achievers Index, this underperformance narrows to 0.2 percentage points.
Franklin U.S. Rising Dividends Fund: Performance Highlights
Franklin Rising Dividends’ performance requires context, given its targeted mandate.
The strategy switched its primary benchmark from the S&P 500 to the Nasdaq US Broad Dividend Achievers Index in 2026 to better reflect its focus on growing dividends. Indeed, over the past 10 years, the strategy recorded a lower tracking error (a measure of differentiation of returns) against the Nasdaq US Broad Dividend Achievers Index than the S&P 500. The US-based Franklin Rising Dividends Advisor Class returned 11.2% annualized over the past 10 years ending March 2026, which was 0.2 percentage points less than their new benchmark. The strategy looks worse against the S&P 500.
Returns since the 2024 manager change reflect some struggles. From October 2024 through March 2026, the fund produced a 4.1% annualized return, which was less than half the Nasdaq US Broad Dividend Achievers Index’s return in US dollars. UnitedHealth Group was a key detractor, as was Microsoft. Yet, there have been some bright spots. The fund has been defensive when needed—it outperformed the large-blend category average in six of the seven S&P 500 corrections since 2019.
Relative rankings against its large-blend peers are understandably poor. The strategy has not owned many of the mega-cap growth stocks that powered returns in the category. Companies like Nvidia, Meta Platforms, and Alphabet were popular stock picks, but didn’t fit here. As a result, the fund’s one-, five-, and 10-year trailing returns ending March 2026 all rank in the bottom quartile. However, it was one of the least volatile funds in the large-blend category as measured by standard deviation.
