|Category:||Equity: Tax Planning|
|Assets:||R 1,158 crore (As on Jun 30, 2014)|
|Expense:||2.50% (As on Mar 31, 2014)|
The scheme seeks medium to long term growth of capital, with income tax rebate. The scheme invests in equities and there is an exposure to PSU Bonds and debentures and Money Market instruments.
+ Anand Radhakrishnan since Apr 2007
+ Anil Prabhudas since Feb 2011
If you hate volatility with your tax saving investments, this fund is among the best options for you. It allows you to participate in equity returns without subjecting you to very sharp downside during the market's corrective phases. Unlike most tax saving funds that tend to be mid or small-cap stock biased, which makes them risky, Franklin India Taxshield has always been a play-it-safe ELSS fund with its large-cap tilt and conservative stock selection. Over the past ten years, these traits have helped it earn a 4 or 5 star rating from Value Research on two-thirds of the time.
However, with its cautious approach, the fund often underperforms in the runaway phase of a bull market. Returns from this fund over the last 3 and 5 years stand at 16.1 per cent and 18 per cent respectively. Both beat the benchmark by 5 and 6 percentage points respectively. In the choppy markets from 2007 to 2011, the fund consistently maintained a very high exposure to bluechip stocks; 70-80 per cent of the portfolio was invested in large-caps throughout this period, far higher than the proportion for the fund's peer group.
Again, the fund doesn't believe in market timing and remains fully invested at most times. The fund's sector preferences show a mix of cyclicals and defensive sectors in recent months. In the June 2014 portfolio, the fund was overweight in financials, healthcare, engineering and communications. It was underweight in technology and energy stocks. The fund follows a growth-value blend to select stocks for its portfolio, focusing mostly on quality stocks.
Among the top five funds in the tax-saving category over a five year period, Franklin India Taxshield has been at the middle of its category in the rising markets of the last one year. This is in keeping with the fund's history; the fund isn't one to top charts in the initial phase of a bull run but manages good long-term returns by evening out downside in falling markets. Due to cautious market cap allocations, the fund tends to lag a bit during the tear-away bull phases in the market.