Franklin India Taxshield Fund

5 Value Research
Change from previous, NAV as on Jul 31, 2015
Category: Equity: Tax Planning
Assets: R 1,767 crore (As on Jun 30, 2015)
Expense: 2.43% (As on Mar 31, 2015)
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
+ Anand Radhakrishnan since Apr 2007
+ Anil Prabhudas since Feb 2011
As on Feb 19, 2015

This reliable performer is ideal for conservative investors shopping for equity-linked savings schemes (ELSS) or tax-saving mutual fund schemes this season. The fund has underperformed the benchmark only four times in its existence of 15 years. It doesn't stand out on the performance chart in a rising market, but it clearly stands out in a market downturn with its ability to restrict its fall admirably vis-à-vis its peers.

Some critics point out that the fund's tendency to play ultra safe may be actually denying investors an opportunity to make more money. They argue that a tax-saving fund can afford to take a little extra risk as it has the freedom to buy and hold stocks because of the mandatory three-year lock-in period. However, the investors flocking to this fund swear by the same traditional approach. They don't mind the fund's average performance in a rising market because they know that it would be more steady than its peers in tough market conditions.

The fund's investment strategy of focusing mostly on large-cap stocks and ignoring momentum stocks also makes it a perfect choice for investors with a low appetite for risk. Its large-cap bias, however, doesn't prevent it from picking small- and mid-cap stocks with long-term growth potential as it aims to own a mix of large-, mid- and small-cap stocks that would help it deliver superior risk-adjusted returns in every market cycle. However, the stocks are selected without compromising on its bottom-up or company-specific approach based on fundamental research, with a medium-to-long-term perspective.

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