Investment objective & strategy
As of Jan. 26, 2026 · prospectusObjective. To earn a high level of current income. Its secondary goal is to seek capital appreciation to the extent it is possible and consistent with the Fund's principal goal.
Strategy. Under normal market conditions, the Fund invests predominantly in high yield, lower-rated debt securities. Lower-rated securities generally pay higher yields than more highly rated securities to compensate investors for the higher risk. These securities include bonds, notes, debentures, convertible securities and senior and subordinated debt securities. The Fund may also invest in preferred stock. The Fund may invest up to 100% of its total assets in debt securities that are rated below investment grade, also known as junk bonds. Investment grade debt securities are rated in one of the top four ratings categories by at least one independent rating agency such as S&P Global Ratings (S&P ) and Moodys Investors Service (Moodys). The Fund may buy both rated and unrated … Under normal market conditions, the Fund invests predominantly in high yield, lower-rated debt securities. Lower-rated securities generally pay higher yields than more highly rated securities to compensate investors for the higher risk. These securities include bonds, notes, debentures, convertible securities and senior and subordinated debt securities. The Fund may also invest in preferred stock. The Fund may invest up to 100% of its total assets in debt securities that are rated below investment grade, also known as junk bonds. Investment grade debt securities are rated in one of the top four ratings categories by at least one independent rating agency such as S&P Global Ratings (S&P ) and Moodys Investors Service (Moodys). The Fund may buy both rated and unrated debt securities, including securities rated below B by Moody's or S&P (or deemed comparable by the Fund's investment manager). The Fund may also invest in defaulted debt securities and in securities issued by issuers in any foreign country, developed or developing. Foreign securities held by the Fund generally will be denominated in U.S. dollars and traded on U.S. markets. The Fund's investment manager is a research driven, fundamental investor that relies on a team of analysts to provide in-depth industry expertise and uses both qualitative and quantitative analysis to evaluate issuers. As a "bottom-up" investor, the investment manager focuses primarily on individual securities. The investment manager also considers sectors when choosing investments and, from time to time, may have significant investments in certain sectors. In selecting securities for the Funds investment portfolio, the investment manager does not rely principally on the ratings assigned by rating agencies, but performs its own independent investment analysis to evaluate the creditworthiness of the issuer. The investment manager considers a variety of factors, including the issuers experience and managerial strength, its sensitivity to economic conditions, and its current and prospective financial condition.
Top holdings
As of March 31, 2026 · N-PORT| Security | Ticker | Value | % of fund |
|---|---|---|---|
| Franklin Institutional US Government Money Market Fund | INFXX | $80.80M | 2.82% |
| MRT MID PART/MRT MID FIN REGD 144A P/P 11.50000000 | MMLP | $29.72M | 1.04% |
| Wynn Resorts Finance LLC / Wynn Resorts Capital Corp | — | $26.22M | 0.91% |
| EMRLD Borrower L.P./ Emerald Co-Issuer Inc. | — | $23.93M | 0.83% |
| California Buyer Ltd. / Atlantica Sustainable Infrastructure PLC | — | $23.55M | 0.82% |
| KEDRION SPA REGD 144A P/P 6.50000000 | KEDRIM | $23.47M | 0.82% |
| Weekley Homes LLC / Weekley Finance Corp 6.75 01/15/2034 | WEEKHM | $23.28M | 0.81% |
| MAUSER PACKAGING SOLUT SECURED 144A 04/30 9.25 | BWY | $23.25M | 0.81% |
| ARI 4.625 06/15/29 144A | ARI | $22.73M | 0.79% |
| RR DONNELLEY + SONS CO SR SECURED 144A 08/29 9.5 | RRD | $21.86M | 0.76% |
Portfolio moves
Dec 31, 2025 → Mar 31, 2026How many positions this fund opened, exited, grew, trimmed, or left unchanged between its two most recent N-PORT snapshots — net changes between point-in-time reports, not a trade log.
Similar funds
Funds whose portfolios most overlap this one, by weight| Fund | Overlap | Net exp. |
|---|---|---|
| Franklin High Yield Corporate ETF · FLHY | 67% | 0.40% |
| Venerable High Yield Fund · VHYVX, VHYIX | 63% | 0.72% |
| Putnam VT High Yield Fund | 53% | 0.73% |
Advisers
| Firm | Role |
|---|---|
| Franklin Advisers, Inc. | Adviser |
Footnotes
- Expense ratio as of January 26, 2026, from the fund's prospectus.
- Net assets and holdings count as of March 31, 2026, from the fund's N-PORT filing.
- Total return for calendar year 2025, before tax and after fund expenses. Computed by compounding the twelve monthly total returns the fund reported in its SEC N-PORT filings for 2025 (the latest prospectus does not yet chart this year).
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