What is the difference between a growth-stock Roth IRA fund and a Franklin Income fund?


Quick Answer

A Roth IRA is a tax-efficient retirement plan; an individual can hold various investments in a Roth IRA account, including growth funds, says Matthew Malone for RothIRA.com. As such, there is no typical Roth IRA growth stock fund, so there can be no comparison to the Franklin Income Fund.

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Full Answer

With a Roth IRA, individuals make non tax-deductible contributions, unlike a traditional IRA. However, after the age of 59 ½, if they have held the Roth IRA for at least five years, they can make withdrawals without taxes or penalties. In general, there are no limits on the types of investments an individual can make with a Roth IRA, and all purchases of assets and funds within the Roth IRA are tax-free, according to Malone.

The Franklin Income Fund is designed to provide investors with an income stream through investing in a variety of corporate and government bonds and high-dividend stocks, states Franklin Templeton Investments. As of 2014, the fund is composed of approximately 45 percent stocks and 41 percent bonds, with the remaining portions mainly in convertibles. About half of its stock holdings are spread approximately between the utilities, energy and materials sectors, and the remaining half is spread across various other sectors, including health care and information technology.

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