This fund offers no racy returns, but no sleepless nights either. Apt for those who want a low-risk ride in the equity markets
06-Feb-2007 •Research Desk
Want a well-diversified, large-cap oriented portfolio with low volatility and fairly decent returns? Then Franklin India Prima Plus is your cup of tea. Launched around the peak of the IPO boom in September 1994, it started off as a stock collector and had nearly 200 stocks in its kitty by March 1996. The relentless cleaning of the portfolio took years and the January 2001 portfolio revealed 40 scrips. In November the fund had around 42 stocks in its portfolio.
Two years that stand out in the fund's performance are 1998 and 1999. Thanks to big bets in technology, the fund delivered 39 per cent and 209 per cent, respectively. But in 2000, this fund fell harder at 31.89 per cent (category average: 24.27 per cent).
Those days of racy returns are over. While the fund delivers positive returns, it just beats the category average. In 2003, its return of 107 per cent was still lower than the category average of 111 per cent. In 2002, it matched the category average returns and marginally beat the returns in 2004 and 2005. But in 2006 it outperformed the category by a handsome 15 per cent.
That is the essence of this fund: No flashy returns and no sleepless nights. Even during periods when the category delivered negative returns, this fund fell by a lesser percentage. In 2001, when the category delivered 19 per cent, this fund fell by around 5 per cent.
Right from January 2000, the fund has had on an average, 70 per cent of the portfolio in large-caps, a major factor contributing to the stability. The topmost holding - Bharti Airtel (7.21 per cent) - was picked up in 2002, sold in 2003 and again bought in 2006.Grasim and Infosys have been with the fund for years.
As on January 31, 2007, the two-year, three-year and five-year returns were higher than the category average. The one-year returns were 45.02 per cent (category average: 29.54 per cent).