Franklin India Taxshield Fund

4 Value Research
Change from previous, NAV as on Dec 09, 2016
Category: Equity: Tax Planning
Assets: R 2,442 crore (As on Oct 31, 2016)
Expense: 2.41% (As on Oct 31, 2016)
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 Jun 06, 2016

A fund which has stayed determinedly large-cap tilted, even in a category crowded with multi-cap funds, Franklin India Taxshield has delivered good-enough returns to retain four- to five-star ratings for much of the last eight years. 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 of its portfolio to large caps, it has pegged up this exposure even higher, to 75 per cent in the last one year. Mid and small caps now make up a fourth of the portfolio, shielding the fund from any valuation meltdown in this segment of the market. 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. The fund doesn't take cash calls and remains fully invested through cycles.

Outpacing the benchmark in 12 of the last 15 years, this fund has proved more adept at containing losses in bear markets than in really acing its peers in runaway bull phases. The last two years, however, have seen the fund widen its outperformance vis-a-vis the benchmark and the category. The fund's bottom-up picks in automobiles and ancillaries, ports and pharma may explain part of this, as also its underweight positions in PSU banks, metals and energy.

It's a top choice for risk-averse investors seeking ELSS benefits.

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