Franklin India High Growth Companies Fund is an open ended diversified equity mutual fund. Franklin Templeton Mutual Fund is responsible for managing the fund. The fund house has time and again shown that it has capabilities of producing some of the best performing funds in the country. The fund has a knack of investing in firms that have a lot of growth potential. If you are looking for a fund to let your investments grow substantially over a period of time, Franklin India High Growth Companies Fund can be a good option to consider.
About Diversified Equity Funds
As the name suggests, a diversified fund tries to be as diverse in its portfolio as possible. The funds usually don’t have restrictions when it comes to the size of the company or stock or even their sector for that matter. Their main focus is to pick stocks with very high probability of future growth. And in such an event, these funds generate handsome returns for their investors. Franklin India High Growth Companies Fund invests in a variety of sectors and companies and the strategy has worked pretty well till date.
Objective of investing in Franklin India High Growth Companies Fund
One of the primary reasons behind investing in mutual funds is to let savings grow faster than if one were to invest in instruments such as FDs. This case is further illustrated by funds like Franklin India High Growth Companies Fund, whose efforts go into getting the right stock picks for faster growth. Each one of us has certain financial goals when we invest our money. Even if one does not have any predetermined financial goals and just wants their money to work as hard as they do, Franklin India High Growth Companies Fund can help with the same. The fund has a pretty impressive track record when it comes to mid- to long-term time horizon, meaning any investment duration longer than three years. If an investor does not have any short term financial commitments, investing in this fund can be a pretty good option to consider.
Investment style of Franklin India High Growth Companies Fund
The investment style followed by fund managers of Franklin India High Growth Companies Fund is in line with the typical Franklin Templeton investment style. They have a broader array of sector and stocks to choose from and for a much longer time frame. The fund manager is quite aggressive when it comes to picking up stocks that have high growth potential but the picks are made at reasonable rates. As the fund follows a growth based approach, returns during market downtrends can be a bit underwhelming. But if one sticks to the fund for a longer duration, the investor can benefit from the same.
Risk level of Franklin India High Growth Companies Fund
Franklin India High Growth Companies Fund invests over 85% of its assets in the equity market. Thus an investor simply cannot escape market fluctuations or market risk inherent to equity investments. The fund carries a moderately high risk profile along with it. But one will find solace in the fact that the two year lock in period comes to the investor’s rescue. If one stays invested for that duration at least, the investor can get to ride out most of the market fluctuations and in fact stand to be rewarded handsomely for his/her patience.
Tax Benefits of Franklin India High Growth Companies Fund
The Franklin India High Growth Companies Fund is a diversified equity mutual fund hence for taxation purposes it follows the short term and long term capital gains rules of equity investments. In case an investor stays invested in the fund for less than 1 year from date of unit allotment, the applicable tax rate is 15% on profits earned as per current short term capital gains taxation rules. In case the units of Franklin High Growth Companies Fund are held for over a year from the date of unit allotment, the long term capital gains tax payable by the investor is zero. Dividends earned from this fund too are completely tax-free in the hands of the investor. These taxes are in addition to any and all other charges such as exit loads that may be applicable to unit redemptions.
Features of Franklin India High Growth Companies Fund
Inception: Initiation of Franklin India High Growth Companies fund took place on 26th July 2007.
Entry Load: The fund does not charge any entry load to its customers, as per guidelines provided by the Securities and Exchange Board of India (SEBI).
Exit Load: The fund has an exit load of 1% if one wishes to redeem his/her units at any time within 730 days from the date of allotment. An investor can purchase units in the form of SIP as well, but each installment counts as a fresh unit allotment, thereby attracting an additional 730 day exit load period is applicable. The exit load is also applicable if one wants to switch the funds within the lock-in period of 730 days.
Minimum Investment Amount: An investor needs to invest a minimum of Rs. 5000 for the very first time when investing in Franklin India High Growth Companies Fund. The subsequent investments can be in multiples of Rs. 1000. As mentioned earlier, investors can also opt for SIP or Systematic Investment Plan for the fund. In which case, an investor’s monthly investments should be in multiples of Rs. 1000.
About Fund Manager: Roshi Jain, Anand Radhakrishnan and Srikesh Karunakaran Nair are in charge of managing this fund from Franklin India. Ms. Roshi joined the fund house back in the year 2005 and became one of the fund’s co-managers in the year 2012 along with Siva Subramaniam. In the year 2014, she became the lead manager for the fund. She uses her experience as an analyst along with the expertise of her co fund managers to great effect in managing this equity fund.
Franklin India High Growth Companies fund Plan and Options
Franklin India High Growth Companies fund is available as both Regular and Direct plan variants. And an investor can choose either of them with the growth or dividend options. The direct plans have a relatively lower expense ratio, which essentially covers all the administrative and maintenance costs of the fund. But they come so at the cost of slightly higher NAVs.
The growth option reinvests all the gains from the fund back into the fund, allowing for further growth of the fund’s AUM therefore allowing investors to post capital gains. The dividend option, on the other hand, hands over any gains available to you in the form of dividends just like stocks.
Franklin India High Growth Companies Fund Key Holdings
The top 10 holdings of SBI Magnum Global Fund along with the weight assigned to each are as follows*:
|Holdings||Weightage in %|
|State Bank of India||8.92|
|HDFC Bank Limited||8.82|
|ICICI Bank Limited||8.27|
|Axis Bank Limited||7.52|
|Bharti Airtel Limited||5.31|
|Tata Motors Limited||4.79|
|Whirlpool of India Limited||4.14|
|Indian Oil Corporation Limited||3.98|
|Idea Cellular Limited||3.18|
The sector wise holding of the fund is as follows*:
|Sector||Weightage in %|
*The above data is indicative and subject to periodic change depending on fund manager’s strategy as well as SEBI guidelines. Above data is as per fund information released on 30th September 2017.
Who Should Invest?
Franklin India High Growth Companies fund has some extremely talented fund managers at its forefront. Apart from this, the fund has an equally competent supporting team as well, meaning it is in an ideal position to take advantage of all relevant opportunities. The fund tends to perform well when the time horizon is of 3 years and above, which often holds true for most equity funds. If investors are planning for some long term financial commitments and do not mind taking on the risk associated with equity investment, Franklin India High Growth Companies Fund should be on the shortlist.