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Franklin India Flexi Cap Fund
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| Type |
Open ended
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Nature |
Diversified (Equity)
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| Min. Investment |
Rs 5,000 |
Face value |
Rs 10 |
| Entry Load |
2.25% (Maximum) |
Exit Load |
1% (Maximum) |
| Issue Opens |
Jan 17, 2005 |
Issue Closes |
Feb 09, 2005 |
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Franklin India Flexi Cap Fund (FIFCF) is an open-end diversified equity fund that seeks to provide medium to long-term capital appreciation by investing in stocks across the entire market capitalisation range.
| Instruments |
Normal Allocation |
| Equity |
upto 100% |
| Debt/Money Market |
upto 25% |
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FIFCF is a high risk - high return investment proposition within the diversified equity funds segment. Franklin Templeton Mutual Fund presently has large-cap fund i.e. Franklin India Bluechip Fund and a mid/small-cap fund i.e. Franklin India Prima Fund in its portfolio; with the launch of FIFCF, the fund house intends to assimilate features of both the aforementioned schemes into a single offering. FIFCF will have the flexibility to move across market capitalisations, thereby ensuring that investors can gain from a rally in either of the segments i.e. large-cap, mid-cap or small-cap.
Investments in stocks from the mid-cap and small-cap segments are intrinsically risky propositions; FIFCF will be exposed to the same risk levels. The utility of multi cap funds notwithstanding, investors who are already invested in Franklin India Bluechip (managed by Mr. K. N. Siva Subramaniam) and Franklin India Prima Fund (also by Mr. Subramaniam) must consider some points before investing in this fund.
With the inclusion of this fund, you will have at least three Franklin Templeton funds in your portfolio with considerable overlap in terms of stocks and even fund manager style. However, FIFCF offers the added benefit of constant portfolio re-balancing between various stock segments that the other two funds do not offer. Should investors choose to invest in FIFCF, they can consider phasing out investments in the existing funds over time to keep their mutual fund portfolios at a manageable level. The other option is to preserve both Franklin Bluechip and Franklin Prima Fund in your portfolio given the impressive performances posted by these funds and consider investing in a well-managed multi-cap fund of another fund house thereby ensuring a degree of diversification.
For investors who are keen on investing in FIFCF given the impressive track record of its fund managers, an appetite for high-risk investments and a 3-5 year investment horizon should be treated as pre-requisites.
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As stated in the investment objective, the fund intends to invest in stocks across market capitalisations. In its offer documents, the fund has indicated that large-cap stocks (market cap exceeding Rs 15 bn i.e. Rs 1,500 crores) will constitute between 20%-100% of the total corpus. The minimum 20% holding in large-cap stocks will grant a certain degree of stability to the portfolio since these stocks are relatively lesser prone to volatility vis-à-vis their mid/small-cap counterparts.
FIFCF intends to invest upto 70% of its corpus in mid-cap stocks and upto 40% of its corpus in small-cap stocks. This portion of the portfolio could provide the fund impetus for growth; however the same can also be responsible for exposing the portfolio to above-average volatility.
The fund's mandate also permits investments in debt/money market instruments upto 25% of the corpus. Under normal conditions, the fund house intends to maintain a 15% allocation in debt/money market instruments, this allocation can be hiked to 25% in volatile times or for defensive considerations.
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FIFCF will be jointly managed by Mr. R. Sukumar (CIO - Equity) and Mr. K.N. Siva Subramaniam (Portfolio Manager – Equity)
Mr. R. Sukumar is the Director & CIO - Franklin Equity. He holds a B.E. from University of Roorkee and a PGDM from IIM Bangalore. Mr. Sukumar was associated with the Indian Opportunities Fund jointly managed by Martin Currie and Indbank as Head of Research from 1990-1994. He joined the erstwhile Pioneer ITI AMC Ltd. in 1994, which was subsequently bought over by the Franklin Templeton Investments. He manages Franklin India Taxshield, Franklin Infotech Fund and Franklin Pharma Fund amongst others.
Mr. K.N. Siva Subramaniam is the Senior Vice President and Portfolio Manager- Equity. He holds a B.E. from REC, Jaipur and a PGDM from IIM Calcutta. He was associated with IDBI as an Industrial Finance Officer from 1988 - 1993. Mr. Siva Subramaniam joined the erstwhile Pioneer ITI AMC Ltd. in 1993. He manages Franklin India Bluechip Fund, Franklin India Prima Fund and Franklin India Opportunities Fund among others.
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FIFCF is likely to embody the risk-return tradeoff accurately. The fund house is reputed as one which is strong on processes and systems; investors can expect a similar investment style for FIFCF as well. Also FIFCF's investments in mid-cap and small-cap stocks and its strategy of investing in stocks across market caps can help it clock above-average growth; however the fund may also be exposed to commensurately higher risk levels and patches of turbulence.
Disclosure: Franklin Templeton Asset Management (India) Pvt. Limited holds shares in Quantum Information Services Limited.
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