Franklin India Prima Fund: A stable fund for an aggressive investor
The Franklin India Prima Fund is an equity-linked mutual fund that invests mainly in mid-cap companies that demonstrate a high potential for growth and sustainable business practices. The fund mainly invests in the mid-cap segment of the market as these companies are early in their business life-cycle and have a higher potential for growth that large-cap companies. The fund has consistently declared dividend over the last 20 years.
Overview of Franklin India Prima Fund
The performance of the Franklin India Prima Fund is measured against the NIFTY Midcap 150 and has outperformed this benchmark and its category consistently. The fund is ranked among the top-performing equity funds by CRISIL. The fund outperforms its benchmark and category over a 5-year investment horizon. During the Calendar Year 2018 the fund has not performed as consistently, due to a heavy market rally in the mid-cap market. The fund’s annualized returns against its benchmark and category have been provided below:
Annualized Returns Fund
Annualized Returns NIFTY Midcap 150
Annualized Returns Category
The Franklin India Prima Fund follows a blend a blend of value and growth investing. The fund employs a bottom-top approach while choosing its investments and will invest across all sectors of the economy. The fund has a diversified portfolio mainly consisting of stocks in mid-cap companies. The fund is actively managed and takes defensive or aggressive postures depending on the prevailing market conditions. A maximum exposure of 50% of the Assets Under Management (AUM) to derivatives is allowed under this fund and single party exposure will be limited to 10% of the net assets outstanding. You can download Piggy on your Android smartphone for smart mutual fund investments.
The Franklin India Prima Fund is an equity-based mutual fund that invests mainly in mid-cap companies that have displayed sustainable business practices and a strong potential for growth. The fund also invests a nominal amount in debt and other stable money market instruments to provide the fund with a level of stability during volatile market cycles. Under normal circumstances the investment range would be as follows:
% Asset Allocation
Equity and equity related instruments of mid cap companies
Medium – High
65% – 100%
Equity and equity related instruments of other than mid cap companies
Medium – High
0 – 35%
Debt & Money Market Instruments
Low – Medium
0 – 35%
The Franklin India Prima Fund invests heavily in the Finance and Engineering sectors of the economy but also has large holdings in the Automobile, Chemicals, Energy and Service sectors. The Fund primarily invests in mid-cap companies. As this is an open-ended scheme the Fund Manager has the power to change the composition of the fund dynamically to adapt to the prevailing market conditions.
The Franklin India Prima Fund primarily invests its corpus in the mid-cap segment of the capital market. As this segment is highly volatile in nature this fund carries risks associated with market volatility, which can also include possible loss of capital. Settlement periods, trading volumes and transfer procedure can hinder the liquidity of investments in equity and equity related instruments.
As the fund also invests a nominal amount in debt and other money market instruments there are certain risks associated with these markets that it carries as well.
Credit risk refers to the risk of the issuer defaulting on payment of a fixed income security.
Interest Rate Risk
Interest rate changes can change the value of long-term debt drastically, thereby, effecting the Net Asset Value (NAV) of the fund.
The Franklin India Prima Fund endeavors to maintain a well-diversified equity portfolio across sectors to avoid concentration risks which are usually sector-specific.
The fund also tries to maintain a proper asset-liability balance to ensure payments during redemption are made on time and not affected by the liquidity of underlying stocks.
Interest Rate Risk
The maturity of the scheme is kept in line with interest rate expectations to avoid interest rate risks.
The fund endeavors to mitigate credit risk by investing only in medium-high investment grades fixed by SEBI registered credit rating agencies.
Mr. Janakiraman Rengaraju, CFA
Vice President & Portfolio Manager
Mr. Rengaraju comes with 13 years of experience in the investment management industry. Before joining Franklin Templeton he managed investments for Indian Syntans Group, a Chennai-based investment management company. He is currently the Vice President & Portfolio Manager – Equities for Franklin Templeton India AMC Ltd., managing the Franklin India Prima Fund and the Franklin India Smaller Companies Fund. Mr. Rengaraju is a CFA charter holder.
Hari Shyamsunder, CFA
Vice President, Senior Research Analyst
Mr. Shyamsunder is Vice President and Senior Analyst for the Franklin Templeton AMC (India) Pvt Ltd., and is responsible for providing insights on Oil and Gas, Automobile and Auto Ancillaries sectors of the economy. Mr. Shyamsuder holds a Bachelor’s Degree in Engineering from the National Institute of Technology, a Postgraduate Diploma from the Indian Institute of Management, Bangalore and is a CFA charter holder.