Franklin Q1 2026: $1B Into Kroger, +135% AT&T, Trims TDG/ONTO

Franklin Resources entered 2026 with $408.3 billion in canonical AUM and a Q-over-Q holdings value that essentially flat-lined at -0.4% (from $381.98B to $380.45B). For a multi-affiliate active manager whose top three positions are NVDA, MSFT, and AAPL — and whose two largest discretionary additions of the quarter were Kroger and an iShares value-factor ETF — the story is in the second derivative, not the headline.

This brief unpacks what Franklin Resources's 2026Q1 13F actually shows: a top of book that still reads as benchmark-aware mega-cap tech, a tail that reflects active conviction toward consumer-defensive value and a contrarian +135% add to AT&T, and a set of disposals concentrated in defense and semiconductor capital-equipment names that telegraphs where the firm thinks the late-cycle risk lives.

Snapshot — 2026Q1

• Canonical AUM: $408.30B (Source: reported_totalAum). Holdings value sum: $380.45B; 500 positions, unchanged from Q4 2025.
• QoQ value change: -0.4% ($381.98B → $380.45B) — essentially flat, consistent with a benchmark-aware multi-affiliate complex during a quarter when the S&P 500 moved sideways.
• WhaleScore: 67.75 — mid-tier among active managers, reflecting a portfolio whose top 10 sits at roughly 26% concentration and whose tail churn is modest.
• Biggest QoQ adds: KR (+721% shares, $1.1B added value), IWD (+476%, $505M), AJG (+401%, $423M), BSX (+159%, $923M), T (+135%, $570M).
• Biggest QoQ trims: TDG (-62%, $166M), ONTO (-57%, $119M), ITW (-57%, $98M), TYL (-56%, $95M).

The top of book is index-shaped — and that is the point

Looking at the top 10, Franklin Resources is holding the same names as every other $400B-class active manager: NVDA $16.84B (4.43%), MSFT $14.22B (3.74%), AAPL $12.33B (3.24%), AMZN $11.19B (2.94%), GOOGL $10.34B (2.72%), AVGO $8.86B (2.33%), XOM $7.03B (1.85%), META $5.55B (1.46%), GOOG $4.97B (1.31%), CSCO $4.52B (1.19%). All five of NVDA/MSFT/AAPL/AMZN/AVGO/XOM are flagged "held roughly flat" — they sat through the quarter rather than being actively traded.

For a complex of this size with an active mandate, that is not a failure of conviction; it is a quiet active call. Holding NVDA flat at 4.43% of the book through 2026Q1 — a quarter where benchmark weights inched higher with the AI capex narrative — is a relative underweight versus the S&P 500 weight, especially given how concentrated benchmark mega-cap exposure now is. The names where Franklin added — GOOGL +9% shares, META +12% shares, GOOG +20% shares, CSCO +16% shares — share a single thread: enterprise-software / digital-ads exposure with more reasonable forward multiples than NVDA's. Read together, the top-of-book activity is a soft rotation within mega-cap tech rather than away from it.

The Kroger +721% trade is the headline of the quarter

The single most aggressive position-level move in Franklin's 2026Q1 file is Kroger: shares went from 1.85M to 15.22M, an +721% increase, contributing roughly $1.1B of added value. Kroger had been a sub-$200M holding entering the quarter; by quarter-end it sits comfortably inside the firm's top 50 positions. That is not a rebalancing trade — it is an investment-committee call, and it lands in the same quarter that Boston Scientific (BSX) was bulked up by +159% (+9.03M shares, $923M added) and the iShares Russell 1000 Value ETF (IWD) was raised by +476% (+1.95M shares, $505M added).

The shape of that adds list is informative. KR is a defensive-consumer cash-flow compounder; BSX is a med-tech compounder with a different growth profile but a similar defensive cash-flow read; IWD is a beta-neutral value tilt. AJG (Arthur J. Gallagher) at +401% adds insurance-broker fee income to the mix. And T (AT&T) at +135% shares — adding 11.3M shares to lift the position to 19.68M shares ($570M) — leans into the dividend-yield trade at a price level where AT&T's free-cash-flow coverage is finally tracking management's deleveraging guidance. Together, these five names amount to roughly $3.5B of newly committed capital concentrated in defensive cash-flow and value-factor exposure.

The trim side reads as the inverse. TransDigm (TDG) -62%, Onto Innovation -57%, and Tyler Technologies -56% are all premium-multiple growth names that have outperformed the broader market over the prior 18 months. Trimming high-multiple winners while bulking up cash-flow compounders is the classic late-cycle rotation pattern — not a recession call, but a posture change.

What the QoQ-flat AUM disguises

The headline -0.4% QoQ change masks meaningful internal rotation. With 500 positions in and 500 positions out (identical count), the book did not shrink — it transitioned. The estimated turnover implied by the size of the moves above is non-trivial: $3.5B in concentrated adds plus another estimated $500M-$700M in concentrated trims means roughly 1% of the portfolio was repositioned in a single quarter. For a multi-affiliate complex whose individual sleeves have different mandates, 1% of $380B reflects coordinated activity, not noise.

The AUM curve over the trailing quarters supports a "stable plumbing" read: Franklin's reported 13F total has moved within a narrow band, while the underlying composition has been more active. That dynamic is consistent with a firm whose distribution channels generate steady net flows and whose investment teams use those flows to reposition incrementally rather than relying on raw market-beta to drive the headline value.

Where this leaves the cross-portfolio read

For readers tracking institutional positioning in specific names, Franklin's 2026Q1 file is useful in three specific contexts:

• KR: Franklin is now a top-tier active holder. Watch the next 13F window for confirmation that this was a quarterly entry rather than a multi-quarter build.
• T: The +135% addition takes Franklin's AT&T position to 19.68M shares ($570M). This is the kind of activity that, when echoed in two or three other top-30 active managers' Q1 13Fs over the coming weeks, marks the beginning of a meaningful institutional rotation back into the name.
• BSX: Franklin's +9M-share add is among the largest single-quarter institutional accumulations Boston Scientific has seen in the past two years. Cross-check against the aggregate signal feed to see whether the move was idiosyncratic or part of a broader institutional rotation.

For readers tracking Franklin Resources as an active-manager signal, the quarterly takeaway is straightforward: a complex this large rarely makes loud calls, but the 2026Q1 adds tell you where the investment committee sees mid-cycle value and the 2026Q1 trims tell you where they think the multiple-compression risk lives. Both are actionable signals if you trust the source.

SEC source

Franklin Resources' Q1 2026 13F-HR filing is the primary document for everything cited above. The filing index sits on Franklin's EDGAR 13F feed. Sleeve-level disclosures for individual Franklin affiliates (Franklin Advisers, Franklin Templeton Investment Management, etc.) file separately under their own CIKs and roll up to the parent.

Compare across quarters: Franklin Resources's full 13F history and holdings is the canonical reference.