Mutual Fund - Franklin India Flexi Cap Fund - Growth : Analysis

Franklin India Flexi Cap Fund - Growth

Type: Equity Diversified Fund Manager: R Sukumar, K.N Siva Subramanian Launch Date: 09-Feb-2006 Franklin India Flexi Cap Fund was launched in Feb 09, 2006, and has been in operation for more than a year now, and has grown at a CAGR of 47.95%. The investment objective of the scheme is to provide medium to long term capital appreciation by investing in stocks across the entire market capitalisation range. The theme that this scheme follows is to have a flexible investment mandate, allowing the fund manager to shift allocation across large, mid and small cap stocks, considering the prevailing market situation. A look at some of the indices from March 05 reveals that the scheme has outperformed its benchmark index CNX 500 by a handsome margin of 15.66% in the last one-year period, but its out performance compared to CNX Midcap and CNX Nifty Junior is even greater at 29.52% and 32.41% respectively. But the scheme has underperformed BSE Sensex by a marginal 0.11% in the same period. Franklin India Flexi Cap fund currently has a large cap exposure of around 74%, midcap exposure is restricted to around 15% and exposure to small cap scrips is around 4%.The asset allocation in the last one-year has generally been biased toward large cap stocks, and on an average large cap exposure has remained over 75% of the net assets. Franklin India Flexi Cap Fund manages assets worth Rs 2674.28 crores, which has seen a steady increase, since its launch. Lately the fund has seen some erosion of assets as the corpus fell from around Rs 3000 crores in Apr to present levels, but that could be attributed to the market meltdown. The scheme has invested in 49 scrips and top 5 holdings account for 27.82% of the portfolio and top 10 scrips constitute 46.03% of the portfolio, therefore it has a pretty diversified portfolio.

The total equity allocation is 93.74% of the net assets and 6.26% of the net assets are invested in cash and equivalent. Infosys Technologies Ltd, MICO and Grasim Industries Ltd comprise top three stocks in the portfolio. The scheme added fresh positions in stocks like Reliance Industries Ltd, Gujarat Ambuja Cements Ltd, IDFC and Lupin Ltd, whereas, the scheme exited from some of the stocks completely like Bajaj Auto, Castrol India, HLL, Tata Steel and ICICI Bank.

Performance as on August 16, 2006   Absolute Compound Annualized Scheme Name 3 Month 6 Months 1 Year Since Inception Franklin India Flexi Cap Fund - Growth -7.03 8.12 47.25 47.95 Rank 37/156 34/133 11/118 -- CNX 500 -8.08 5.24 31.59 -- Peer Group Average -9.67 3.38 31.73 --

The scheme is still in its early days and is ranked in the eleventh place in the one-year return period amd though it is not performing as well as some of the other equity schemes, but that is chiefly because of the over dependence on large cap stocks since its inception, the scheme has preferred to played it safe. Franklin India Flexicap has a huge asset base and strong parentage, which are some of the factors which will help the scheme perform better if the sentiments improve on the dalal street going forward.