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Inconsistently Dynamic

Templeton India Growth has been dynamic but inconsistent

No one can accuse this fund of being a dynamic offering.

It started off as a hard core value offering but took a growth stance somewhere down the road. While it would be wrong to classify it as a growth fund, it's safe to put it under the 'value-at-reasonable-growth' umbrella.

Though it has been around for over a decade, consistency has not been its virtue. It has displayed sporadic bouts of brilliance. In 2003 and 2007, it returned a whopping 138.82% and 63.11% against the category average of 110.17% and 59.77%, respectively. It has also duly impressed during market downturns. In 2000 and 2001, the fund managed to curtail its losses to only (-)2.78% (category average: -24.64%) and (-)6.82% (category average: -19.45%) respectively.

But it would be wrong to blame its lack of flash purely on its value orientation. It is fairly laid back in its response to sector movements. The fund manager does not shirk from taking concentrated sector bets, but he tends to get stuck with them even when they lose their lustre. His favourites (and yes, he does have them) are Energy, Financial Services and Metals. When these sectors are chased by the broad market, his fund outperforms. When not, it gets punished. Its outstanding performance in 2003 was due to its concentrated exposure to Energy, Financial Services and Auto sectors. Similarly, in 2007, the fund's high exposure to Energy, Metals and Financial Services is what came helped it.

In the recent market fall, the fund has done fairly well. The value orientation and its penchant for large caps paid off, despite holding a fairly concentrated portfolio of around 30 stocks. But overall, its inconsistent performance and inactive churning have not served investors well.