Franklin Templeton Investments
One Franklin Parkway
San Mateo, CA 94403-1906
February 26, 2016
VIA EDGAR
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549-9303
Attention: Ms. Karen Rossotto
Re: Franklin Managed Trust (the “Registrant”)
File No. 333-208952
Dear Ms. Rossotto:
On behalf of the Registrant, below are the Registrant’s responses to the comments you conveyed telephonically on February 10, 2016 to Cory Hippler of Stradley Ronon Stevens & Young, LLP, with regard to the Registrant’s registration statement on Form N-14 (the “Registration Statement”) relating to the proposed reorganization of the Franklin Large Cap Value Fund (the “Large Cap Fund”), a series of Franklin Value Investors Trust, with and into the Franklin Rising Dividends Fund (the “Rising Dividends Fund”), a series of the Registrant. The Registration Statement was filed with the U.S. Securities and Exchange Commission (“SEC”) on January 11, 2016 under Rule 488 under the Securities Act of 1933, as amended (the “Securities Act”).
Below we have provided your comments (in bold) and the Registrant’s response to each comment. These responses will be incorporated into a filing to be made pursuant to Rule 485(b) of the Securities Act. Capitalized terms not otherwise defined in this letter have the meanings assigned to the terms in the Registration Statement.
Prospectus/Proxy Statement Comments
Under normal market conditions, the Large Cap Fund invests at least 80% of its net assets in investments (predominately, common stock) of large-capitalization companies (i.e., companies with market capitalizations that are similar in size to those in the Russell 1000® Index at the time of purchase)….
Comment: The definition of large capitalization companies is broad. Provide additional information, including the capitalization range of the companies in the Russell 1000® Index.
Response: The Registrant has added disclosure that describes the capitalization range of the companies in the Russell 1000® Index, as well as the weighted average and median market capitalizations of the Large Cap Fund’s portfolio.
“…the portfolios of both Funds (except for cash) were comprised entirely of large-capitalization companies (based on the definition used by the Large Cap Fund) as of October 31, 2015.”
Comment: Modify the statement that both Funds are invested entirely in large capitalization companies, which may be confusing due to the broad definition of “large-capitalization companies.”
Response: As noted in footnote 2 to the fee and expense table on page 15, on July 14, 2015, the FVIT Board approved, effective August 1, 2015, a reduction in the distribution and service (12b-1) fee from 0.30% to 0.25% for Class A shares of the Large Cap Fund until further notice and approval by the FVIT Board. This footnote has been revised to state that the distribution and service (12b‑1) fees for the Large Cap Fund’s Class A shares have been restated to reflect the new reduced maximum rate set by the FVIT Board and, as a result, the total annual fund operating expenses differ from the ratio of expenses to average net assets shown in the financial highlights due to a different 12b‑1 fee rate paid in the Large Cap Fund’s most recent fiscal year.
Response: Updated performance information as of December 31, 2015 has been included.
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Response: The disclosure has been revised as requested.
Response: The last sentence under the heading “Reasons for the Transaction” states: “The Boards unanimously approved the Plan on December 4, 2015 and the FVIT Board unanimously recommended that shareholders of the Large Cap Fund vote to approve the Plan.”
“Both Funds may invest up to 25% of their total assets in foreign securities...”
Comment: If applicable, disclose that one or both Funds may invest in emerging markets.
Response: Neither Fund invests in emerging markets as a principal investment strategy.
Response: The disclosure has been revised as requested, and the tax consequences are confirmed. The revised disclosure clarifies that the Investment Manager currently estimates that a small portion of the Large Cap Fund’s portfolio assets may be sold before the closing of the Transaction as part of a portfolio repositioning (and separate from normal portfolio turnover), which is not anticipated to result in any material amounts of capital gains being distributed to shareholders. The revised disclosure also clarifies that, after the closing of the Transaction, a portion of the Large Cap Fund’s portfolio assets may be sold in the ordinary course of business, which is not expected to result in any material amounts of capital gains to be distributed to shareholders due to the relative sizes of the Large Cap Fund ($196 million) and the Rising Dividends Fund ($15.9 billion) as of December 31, 2015.
Response: The disclosure has been revised as requested. See the response to comment 9, above.
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Response: The Registrant has added disclosure to the comparison of principal investment strategies that from time to time, based on economic conditions, the Rising Dividends Fund may have significant positions in particular sectors including, for example, health care and industrials.
Response: The disclosure has been revised as requested.
“Management recommended the Transaction because of the closely aligned investment goals and generally similar principal investment strategies and principal investment risks of the Funds...”
Comment: Please revise the statement that the Funds’ principal investment strategies and principal investment risks are generally similar to say, for example, that the Funds’ principal investment strategies and risks have some similarities.
Response: The disclosure has been revised as requested.
Response: The heading has been revised as requested.
“The Board also considered that the Funds had a similar number of holdings...”
Comment: Explain why the number of portfolio holdings is relevant.
Response: The disclosure has been revised to clarify that the Funds had a significant number of common holdings.
In connection with the Registrant’s responses to the SEC staff’s comments on the Registration Statement, as requested by the SEC staff, the Registrant acknowledges that: (i) the Registrant is responsible for the adequacy of the disclosure in the Registrant’s filings; (ii) SEC staff comments or changes to disclosure in response to SEC staff comments in the filings reviewed by the SEC staff do not foreclose the SEC from taking any action with respect to the filings; and (iii) the Registrant may not assert SEC staff comments as a defense in any proceeding initiated by the SEC under the federal securities laws of the United States.
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The Registrant believes it has fully responded to each comment. If, however, you have any further questions or require further clarification of any response, please contact Steven J. Gray, Esq. by telephone at (650) 312-2018, or in his absence, Claudia de Alba at (212) 632-3023.
Regards,
/s/STEVEN J. GRAY
Steven J. Gray, Esq.
Vice President and Secretary of the Registrant
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