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Married to Stability

This fund rarely delivers surprises - on both upside as well as downside. But that's its real charm. It quietly goes on and on to get the job done

Managed by one of the finest minds in the Indian mutual fund industry, Franklin India Prima Plus offers a well-diversified large-caps oriented portfolio, low volatility and decent returns. The fund should find a place in the core of any portfolio.

The fund's disciplined investing approach and preference for stability have a lot to do with its history. It has seen the IPO and tech bubbles bust and booms and survived as one of the best options of all times.

Even the ongoing bull run has not forced the fund management the take any outrageous step to catch on with some of the hot performing peers. Sukumar Rajah, who has been nourishing the fund since its launch in September 1994 despite the fund undergoing two ownership changes, continues to pick stocks with conviction and wait for them to blossom.

The fund is still enjoying its long-term bet on large-cap picks like Infosys, Hindalco and Grasim Industries. The fund's exposure of around 35 per cent to mid-caps has also helped it capitalise on the ongoing rally. Stocks like Cummins, Madras Cements and Marico have been huge successes. The fund manager's confidence in media stocks - NDTV and TV 18 - too has clicked.

The fund has evolved well under Rajah. Launched around the peak of the IPO boom, Prima Plus started as a stock collector. By March 1996, the fund's portfolio was totally out of focus with nearly 200 stocks in its kitty, including many small-cap and illiquid issues.

Despite relentless cleaning of the portfolio, the fund took nearly four years to consolidate. Since 1998, the fund has been focusing on large- and mid-caps and to a more manageable number of issues. A sharpened portfolio focus has helped it generate decent returns since then.

This year, it has started off well - till April 4, the fund was up 34.11 per cent against 30.89 per cent rise of an average peer. Among others, auto and basic engineering stocks, which the fund has started liking now, have helped.

However, one shouldn't expect any miracle here. This fund will work hard to generate returns and keep your money safe, something that is well reflected in the way it has managed the downside. If you prefer stability over flashy returns, this is the fund to have.