Franklin Build India Fund Direct Growth INF090I01JF5

Franklin Build India earns an Average Process Pillar rating.

The predominant contributor to the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its ten-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. Management team experience, which averages 23 years at this fund, also supports the process. However, the process is limited by its parent firm's disappointing risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.4 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy tends to hold larger, more undervalued companies compared with its average peer in the Equity - Infrastructure Morningstar Category. Examining additional factor exposure, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. This gives the managers more flexibility during bear markets to sell without adversely affecting prices. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, this strategy's portfolio has held more stocks with high dividend or buyback yields than peers over recent years. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. In this month, the strategy also had more exposure to the Yield factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in energy and utilities relative to the category average by 3.9 and 3.6 percentage points, respectively. The sectors with low exposure compared with category peers are basic materials and industrials, underweight the average by 7.5 and 3.2 percentage points of assets, respectively. The portfolio is positioned across 39 holdings and is relatively top-heavy. Of the strategy's assets, 51.1% are concentrated within the top 10 holdings, compared to the category’s 29.1% average. And in closing, in terms of portfolio turnover, on a year-over-year basis, 31% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.