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Fund Focus: Married to Stability

Definitely a long-term winner but not a flashy equity fund

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. During the last month's mayhem, the fund managed volatility quite well, losing less than an average peer.

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 continues to pick stocks with conviction and wait for them to blossom since its launch in September 1994 despite the fund undergoing two ownership changes.

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 fund will work hard to generate returns and keep your money safe. If you prefer stability over flashy returns, this is the fund to have.