Search the Internet          Tips  Sites: Finance, Investment

Franklin India Balanced Fund

Dhirendra Kumar

Franklin India Balanced Fund (G) seeks to create a portfolio with a debt equity mix in the range of 60-40% each. Entry into the fund carries a load between nil and 1 per cent depending on the amount invested. Exit within 12 months also carries a load between nil and 1 per cent, with load increasing for higher values of investments.

FUND BASICS   Objective    Size (Cr)    NAV: 21/05/2001    Exit Price    Entry Price    Total Return   Balanced   3.66   8.74   8.74   8.83   -12.60%

Launched in July 2000, Franklin India Balanced Fund actually jumped the gun. Although, launched at a time when already a good amount of correction had set in the markets, the fund nevertheless, lapped up stocks much before the dust started to settle. The caution that the fund showed by staying out of debt, which also during that period was under a turbulent spell, does not seemed to have been reflected in equities. With the fund investing more than 50 per cent in equity by October 2000, with 25 per cent of it in infotech, the unabated fall in the bourses had the fund bear the bruises. Nevertheless, while the fund sought to invest in equities at lower valuations, it did not go overboard with its allocation to it.

Benchmark Comparisons (%) (18/05/2001)      1M    3M    6M    1Yr    3Yr   Fund   3.82   -8.72   -4.51   -   -   VR Bal Index   4.08   -5.57   3.45   1.22   8.89   Obj. Avg.   4.57   -9.64   -8.06   -9.04   9.28

Its debt investments have been in bonds of Public Sector Units or Public Financial Institutions and debt instruments of corporates. That the fund has not actively managed its debt portfolio and has chosen to stay out of gilts proves that it has taken a call on coupon income rather than trading profits through interest risk management. While, the fund is invested in a quality portfolio, no information is available on its maturity profile.

Currently, the fund is a well-balanced portfolio with an equity:debt mix of 54:46. The equity portfolio is a good blend with the growth sectors of software, FMCG and healthcare together accounting for 40 per cent of the assets and the balance accounted by cyclical sectors. Further, the fund has adopted a conservative strategy of a less volatile debt portfolio sans the government securities. Nevertheless, it would be too early to take a credible stance on the performance of the fund given its brief track record.

Top Equity Holdings (30/04/2001)      Value (Cr)    % of Assets   Britannia Industries   0.16   4.37   Cipla   0.14   3.86   Smithkline Beecham Con. Healthcare   0.14   3.69   Asian Paints   0.12   3.34   BPCL   0.12   3.22   Infosys Tech.   0.11   2.96   Hoechst Marion Roussel   0.11   2.88   Hughes Software Systems   0.10   2.79   HDFC   0.09   2.36   Polaris Software Lab   0.09   2.36   S S I   0.09   2.32

   

Top Debt Holdings (30/04/2001)      Value (Cr)    % of Assets   IDBI   0.45   12.32   I C I C I   0.35   9.60   Tata Electric   0.30   8.31   Cyrus Investment   0.10   2.84

Source: Value Research

Money

Fund File

Tell us what you think of this report