Franklin India Balanced Fund (D) seeks to create a portfolio with a debt equity mix in the range of
25-Jun-2001 •Research Desk
Franklin India Balanced Fund (D) seeks to create a portfolio with a debt equity mix in the range of 60-40% each.
Franklin India Balanced Fund (D) so far has a similar debt equity mix as the growth option, investing in almost the same set of stocks as also in the same proportion. Launched in July 2000, the fund actually jumped the gun. Although, launched at a time when already a good amount of correction had set in the markets, the fund nevertheless, lapped up stocks much before the dust started to settle. The caution that the fund showed by staying out of debt till October '00, which also during that period was under a turbulent spell, does not seemed to have been reflected in equities. With the fund by August '00 investing more than 50% in equity out of which 25% was in the infotech sector, the unabated fall in the bourses had the fund bear the bruises and go below par. Nevertheless, while the fund sought to invest in equities at lower valuations, it did not go overboard with its allocation to it.
The investments in debt since November 2000 have been in bonds of Public Sector Units or Public Financial Institutions and debt instruments of Corporates. That the fund has not actively managed its debt portfolio and has chosen to stay out of Gilts proves that it has taken a call on coupon income rather than trading profits through interest risk management. While, the fund is invested in a quality portfolio, no information is available on its maturity profile.
Currently, the fund is a well-balanced portfolio with a equity debt mix of 55: 44. The equity portfolio is a good blend with the growth sectors of software, FMCG and healthcare together accounting for 40% of the assets and the balance accounted for by the cyclical sectors. Further, the fund has adopted a conservative strategy of a lesser volatile debt portfolio sans the government securities. While, the fund has so far been an average performer, it would nevertheless be too early to take a credible stance on the performance of the fund given its brief track record.