Earlier this week, John Templeton sadly passed away at the age of 95. Templeton created the Templeton Growth Fund back in 1954, but many articles about his passing avoided this subject when they summarized his life.
Instead, most obituaries focused on Templetons philanthropic contributions to society, and while these contributions are clearly noteworthy, something seemed to be missing, The Globe and Mail reports. If the fund was mentioned at all, it was typically only a brief passing statement that pointed to the funds $440 million sale to the Franklin Group in 1992.
However, the mutual fund industry has changed dramatically over the past 50 years, and the reality of the situation is that the Templeton fund--which originally stood out for its outstanding global calls, performance and low fees--is now just one face in a sea of many in a commoditized business.
These days, larger funds dominate the game, and sometimes it appears that a firms total assets under management may matter more than what the actual returns for investors are. Though Templeton cared about investors, and he cared greatly about fees.
As the industry moved towards higher fees and higher commissions, Templeton tried to resist this shift. In fact, right up until 1992 when the fund was sold, the management expense was 0.93%. Since then, it has increased to over 2%.
Although the fund has averaged annual returns of only 1.9% the past decade, consider what would have happened to $10,000 invested when the fund was created. Before its sale, the Templeton Growth Fund delivered an averaged annual return of 12.8%, meaning an initial $10,000 invested in the fund when it was created in 1954 would make it worth an estimated $5.8 million today, according to Globefund.com
The reality is that Templeton is no longer a top brand as far as Canadian funds are concerned, and it does not even measure up as one of the 30 biggest names in the field. The fund did make an impact, but ironically, as the mutual fund industry grew and flourished, Templetons dominance essentially vanished.