This US-focused strategy seeks long-term capital growth by investing in growth-oriented, small capitalization equity securities.



  • We manage this high-conviction strategy using a bottom-up research-driven, fundamental approach to build a growth-oriented, small capitalization portfolio.
  • Growth for our strategy is not defined by an index, but rather by our broad search across industries for companies with sustainable business models and attractive free cash flow characteristics that we believe will foster their ability to grow faster than their peers over a multi-year horizon.
  • Portfolio managers work continuously with analysts to evaluate securities’ upside potential and downside risks, seeking to maintain a rewarding portfolio.


  • Russell 2000 Growth Index


A multi-page overview highlighting the composite performance, portfolio characteristics, investment process, management team and commentary.



Investment Philosophy

The Franklin Equity Group philosophy holds that companies with the potential for long-term sustainable growth can provide significant opportunities for investors. Market participants can have a short-term perspective and may under appreciate the potential for value created by sustainable growth. We believe that we have the potential to deliver attractive risk-adjusted returns by identifying companies with potential for sustainable growth that is not reflected in their current prices.

Investment Process Summary

Within a collaborative environment, our team uses fundamental, bottom-up research to identify for investment companies that we believe have sustainable growth characteristics—meeting our criteria of Growth, Quality and Valuation.

  • Growth: Focus on companies with potential to produce sustainable earnings and cash flow growth; evaluate the long-term market opportunity and competitive structure of the industry seeking to target leaders and emerging leaders.
  • Quality: Seek companies with strong and improving competitive positions in attractive markets; identify experienced and talented management teams as well as financial strength reflected in the capital structure, gross and operating margins, free cash flow generation and returns on capital.
  • Valuation: Consider a range of potential outcomes based on an assessment of multiple scenarios; evaluate whether, in our view, security prices fully reflect the balance of the sustainable growth opportunities relative to the business and financial risks.


Michael McCarthy

Michael McCarthy, CFA
Executive Vice President, Chief Investment Officer, Portfolio Manager
Franklin Equity Group
With firm since: 1992

Bradley T. Carris

Bradley T. Carris, CFA
Vice President, Portfolio Manager, Research Analyst
Franklin Equity Group
With firm since: 2000