Investment Objective
Franklin Flexi Cap Fund, formerly known as Franklin India Equity Fund, aims to provide capital growth and regular IDCW through a diversified portfolio of equities, fixed income securities and money market instruments.
Investment Strategy
- Franklin Flexi Cap Fund retains the flexibility to invest across large, mid and small sized companies without any market cap bias.
- It uses four decision-making variables for its stock selection process:-
- Compounding Growth Ideas: The fund prefers companies capable of sustaining high return on equity or capital employed; participating in India’s strong economic growth; having recurring revenues and profitable re-investment opportunities; and having strong execution track records. It also prefers companies having management capabilities to scale up their existing business and identify and participate in peripheral business opportunities.
- Contrarian Approach: The fund seeks businesses generating above-average return on equity (ROE) at below average prices; having very healthy long-term business fundamentals; having a good track record of execution capabilities, ROE and cash flows; and having embedded or hidden value ignored or underestimated by the market.
- Cyclical Growth Orientation: The fund prefers companies having sustainable competitive advantage; having the potential to register higher growth rates in their positive cash flows/earnings than their industry/overall economy; and which are valued reasonably in comparison to their peers.
- Disruptive and Innovative Businesses: The fund prefers companies that are suitably positioned to benefit from disruptive changes in the industry/sector/
economy; having the capacity to identify opportunities within changing market dynamics; take risks to create sustainable shareholder value over time; and invest in people/technology/process/brand to ensure disruptive long term growth.
- The fund follows a philosophy of balancing growth with valuations while maintaining neutrality across sectors and market capitalizations.
Who Should Invest
- Investors having investment horizons of 5 years and above.
- Those seeking higher returns with higher volatility than large cap funds.