Franklin India Taxshield Fund

3 Value Research
Change from previous, NAV as on May 21, 2018
Category: Equity: Tax Saving
Assets: R 3,649 crore (As on Apr 30, 2018)
Expense: 2.12% (As on Apr 30, 2018)
Investment Objective

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.

Fund Managers
+ Lakshmikanth Reddy since May 2016
  • Education: Mr. Reddy is a B.Tech in Mechanical Engineering from Jawaharlal Nehru Technical University, Hyderabad and also holds a PGDM from IIM-A.
  • Experience: Prior to joining Franklin Templeton Mutual Fund he was associated with ICICI Pru Life Insurance Company Ltd. as Head-Equity (Jun 2004-Feb 2016), HSBC Capital Markets as Equity analyst (Apr 2003-May 2004), ABN Amro Asia Equities as Equity Analyst (Feb 2000-Mar 2003), UTI as Buy Side Analyst (Jun 1997-Feb 2000) and Crompton Greaves as Design Executive (Aug 1993-Jun 1995).
  • Funds Managed:
  • Franklin India Balanced Fund - since May 2016
  • Franklin India Flexi Cap Fund - since May 2016
  • Franklin India Monthly Income Plan - since May 2016
  • Franklin India Pension Fund - since May 2016
  • Franklin India Taxshield Fund - since May 2016
+ R Janakiraman since May 2016
As on Mar 29, 2018

An established fund in the ELSS category, it has steadfastly maintained a large-cap bias amid different market phases. Consistency of returns and an ability to contain downside have helped it retain four to five-star ratings for much of the last eight years.

The fund's returns in the last one year show a slowdown relative to the category and benchmark. The fund's year-to-year returns don't always beat its more aggressive peers, but its performance adds up to very handsome returns over the long term.

A fund which allocates a minimum 60 per cent to large caps, it has pegged up this exposure even higher, to 80 per cent in the last one year. Mid and small-caps now make up less than 20 per cent of the portfolio. The fund also avoids momentum stocks and sticks to bottom-up fundamentals-based investing. Though this fund is from a growth style fund house, it tends to be quite valuation-conscious. It doesn't take cash calls and remains fully invested through cycles.

The fund has underperformed its benchmark significantly in the last one year, which has also hurt three-year returns. However, in the five-year period, it has outperformed the benchmark by 3 percentage points. In the past, outpacing the benchmark in 12 of the last 15 years, this fund has proved more adept at containing losses in bear markets than riding bull phases to the hilt.

Go for it if you like a less bumpy ride in choppy markets.

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