A quick look at 9 equity funds from Templeton

By Morningstar Analysts |  25-07-18 | 
 

The names of the funds (which appear in blue) are linked to the analyst note. You can go there to read the short review. These funds have been analyzed over the months of November 2017 to June 2018. The date of the analysis has been mentioned.

Franklin India Equity Advantage

  • Category: Large & Mid-Cap
  • Category Benchmark: S&P BSE 200
  • Investment Style: Large Growth
  • Fund Manager: Lakshmikanth Reddy
  • Star Rating: 3 stars
  • Analyst Rating: Bronze
  • Analyst: Himanshu Srivastava
  • Date of Analysis: June 2018

The fund management team follows a research-driven investment approach with a focus on reasonably valued stocks. The fund’s performance has taken a hit over the past few years. Having said that, Franklin Templeton has a strong investment team and their execution capabilities are well established. With the solid backing, we expect the fund to outperform the benchmark index and category peers over the long term.

Franklin India Taxshield

  • Category: ELSS
  • Category Benchmark: S&P BSE 200
  • Investment Style: Large Growth
  • Fund Manager: Lakshmikanth Reddy, R Janakiraman
  • Star Rating: 4 stars
  • Analyst Rating: Bronze
  • Analyst: Himanshu Srivastava
  • Date of Analysis: June 2018

The investment process is research-intensive and relies heavily on a bottom-up approach. The fund’s underperformance under Reddy could be largely attributed to its comparatively poor showing in 2017 - higher exposure to large caps when mid-caps had a dream run and the subpar performance of stocks from the healthcare & technology space, and exposure to a few struggling stocks such as Tata Motors.

Templeton India Equity Income

  • Category: Dividend Yield
  • Category Benchmark: S&P BSE 500
  • Investment Style: Large Blend
  • Fund Manager: Vikas Chiranewal
  • Star Rating: NA
  • Analyst Rating: Silver
  • Analyst: Nehal Meshram
  • Date of Analysis: April 2018

This fund seeks to provide a combination of regular income and long-term capital appreciation by investing primarily in stocks that have a current or potentially attractive dividend yield, by using a value strategy. Foreign equities comprise roughly 30% of the portfolio.

Templeton India Value Fund

  • Category: Value
  • Category Benchmark: S&P BSE 500
  • Investment Style: Large Blend
  • Fund Manager: Vikas Chiranewal
  • Star Rating: 2 stars
  • Analyst Rating: Silver
  • Analyst: Nehal Meshram
  • Date of Analysis: April 2018

The fund hit a rough patch between 2013 and 2015. Not surprising given the value tilt of the fund. The fund manager adopts a buy-and-hold process, which is apt. And has shown resilience by adhering to the process even in periods when value investing is out of favour.

Franklin India Smaller Companies

  • Category: Small Cap
  • Category Benchmark: S&P BSE Smallcap
  • Investment Style: Mid Growth
  • Fund Manager: R Janakiraman
  • Star Rating: 4 stars
  • Analyst Rating: Silver
  • Analyst: Himanshu Srivastava
  • Date of Analysis: December 2017

As the name indicates, this is a small-cap fund. The focus is on quality companies with low leverage, healthy ROEs, free cash flows and consistent growth. Last year the fund found itself in the bottom quartile. It’s 5-year annualized return is 28.36%, which is around the category average.

Franklin India Prima

  • Category: Mid Cap
  • Category Benchmark: S&P BSE Midcap
  • Investment Style: Mid Growth
  • Fund Manager: R Janakiraman
  • Star Rating: 4 stars
  • Analyst Rating: Gold
  • Analyst: Himanshu Srivastava
  • Date of Analysis: December 2017

This fund has an experienced manager, strong team, clear philosophy, and solid track record. Fundamental research forms the crux of the investment process. The fund manager is not very rigid on valuations, so long as the company fulfills his investment criteria. We believe the process is robust and Janakiraman can make it work.

Franklin India Bluechip

  • Category: Large Cap
  • Category Benchmark: S&P BSE 100
  • Investment Style: Large Growth
  • Fund Manager: Anand Radhakrishnan
  • Star Rating: 3 stars
  • Analyst Rating: Gold
  • Analyst: Himanshu Srivastava
  • Date of Analysis: December 2017

This is a true-blue large-cap fund. The fund manager displays strong convictions and deviates significantly from the benchmark index and category peers both in terms of stock picks and sector weights. He prefers private-sector entities over their public-sector counterparts, in line with his belief that the former offer more robust business models and superior operational efficiencies.

Franklin India Equity

  • Category: Multi Cap
  • Category Benchmark: S&P BSE 500
  • Investment Style: Large Growth
  • Fund Manager: Anand Radhakrishnan
  • Star Rating: 4 stars
  • Analyst Rating: Gold
  • Analyst: Himanshu Srivastava
  • Date of Analysis: December 2017

The investment style has a few caveats. The penchant for concentrated and contrarian bets can expose the fund to above-average volatility and result in a divergent showing versus the norm in the short term. Also, the quality bias and valuation-consciousness may hold the fund back when speculative fare is in favour. Clearly, investors must have an investment horizon spanning a market cycle.

Franklin India Focused Equity

  • Category: Multi Cap
  • Category Benchmark: S&P BSE 500
  • Investment Style: Focused
  • Fund Manager: Roshi Jain
  • Star Rating: NA
  • Analyst Rating: Silver
  • Analyst: Himanshu Srivastava
  • Date of Analysis: November 2017

The stock and sector bets may expose the fund to above-average volatility if the investment thesis goes wrong. Given the focus of high-growth companies, the fund may struggle in an event of a downturn in economic growth or when the impending growth in the economy is delayed. But we draw confidence from Jain’s presence at the helm.

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sandeep deshmukh
Jul 26 2018 08:13 PM
larissa, noticed your message boards have a lot of chatter on icici pru. do you recall our past discussion on similar lines. icici pru winning gold & the benevolence vs. incompetence debate. this week read in the paper that icici pru also used own equity funds to invest in bharat 22 etf that they manage. another charge and no rebuttal. you were disturbed by my statements on their gold award. now with all that has transpired are you comfortable saying that your research is competent and above board?
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