About Franklin India Prima Fund

Franklin India Prima Fund is an open ended Mid Cap Fund that invests in medium capitalization stocks that have the potential to give higher returns than Large Cap Funds when market trends are favourable but also carry higher risks of market volatility if markets are down. It invests in stocks of companies that show good potential for growth in the early business cycle so that the shares purchased at lower costs earlier can be sold off at higher rates later so as to earn optimum returns.

Its corpus is invested majorly in equities of firms from various sectors such as banks, industrial products, consumer durables, auto ancillaries, etc. Its holdings include Kotak Mahindra, HDFC, ICICI, Voltas among the reputed companies.

Who should Invest?

• Equity Mutual Funds can offer better returns in long term and mid capitalization stocks take time for value-realisation so investors with long term horizon should invest in this
• In spite of aiming for Long Term Capital Gains (LTCG), investors can have secondary objective of regular income through dividends as their short term financial goal
• As it invests in equities of medium sized firms, it is exposed to market volatility and thus investors with high risk potential should invest in this fund
• Assuming you are going to be invested for a longer term, the SIP route of investment will help you reap the benefits of the power of compounding and  rupee cost averaging (the fund does allow lump sum investments as well as SIP)

Risks

Returns are never guaranteed in case of Equity Funds and then Mid Cap Funds hold high market risks as in case the unit prices that were expected to rise in the market may not happen. Also, an ideal investment is supposed to be for 5-7 years in this fund otherwise you may not get high returns if you redeem it earlier.

Will You Pay Tax?

If you withdraw or redeem the units before one year of investment, Short Term Capital Gains Tax of 15% is levied. Whereas, Long Term Capital Gains Tax above ₹1 lakh will be taxed at 10% after completion of 1 year of investment.

If an investor has made a capital gain of ₹50,000 on investment in an Equity Fund, Short Term Capital Gains Tax would be ₹7500.

If an investor has made a capital gain of ₹1.5 lakh on investment in an equity fund, and withdraws the amount after 1 year of investment, Long Term Capital Gains Tax of 10% would be levied on ₹50,000. ₹1Lakh is exempted from taxation. The payable tax would be ₹5000.

Also, Dividends paid out by the Franklin India Prima Fund are taxed at 10% and around 11-12% including the other surcharges known as Dividend Distribution Tax (DDT).

How to invest in Franklin India Prima Fund?

• Sign Up/Sign In to Paisabazaar.com and go to ‘Direct Mutual Funds’
• Click on the section of Franklin India AMC
• Type and search directly by the name of Franklin India Prima Fund. Once it opens up, look at the details. You can also compare similar funds as well as use Returns Calculator
• Click on ‘Invest Now’, select either Lump sum or SIP

Why choose Paisabazaar?

• Trusted website, no commission charges and no paperwork
• You can compare more than 1,700 Funds at one platform instead of visiting the website of each AMC and then searching for numerous funds
• Easy to browse as Funds are segregated under Equity, Debt, Large Cap, ELSS, etc. You can further add filters of ratings, returns, fund houses
• Important scheme details such as latest Net Asset Value (NAV), Expense Ratio, Assets Under Management (AUM), etc are also available on the portal, making it easier for consumers to pick a suitable fund

Frequently Asked Questions (FAQs)

Q. Should you invest in Franklin India Prima Fund?

Ans. It depends on the risk appetite, investment horizon and financial goals. If your objective and risk tolerance matches up with that of this fund as mentioned above then you may invest in this fund or look out for other options such as for example Liquid Fund for short term and low risks.

Q. Is it beneficial to invest via open-ended (lumpsum) or SIP?

Ans. SIP (Systematic Investment Plan) is considered an efficient and convenient mode of investment that is beneficial in the long term investment. It also reduces financial burden as one needs to invest periodically and provides the benefit of rupee averaging cost.

Q. What is the entry load for this fund?

Ans. There is no applicable entry load on the aforementioned fund.

Q. What is the Exit Load for this scheme?

Ans. If an investor redeems the purchased units within 1 year of allotment of units, an Exit Load of 1% is payable by the investor. However, no exit load is levied for redemption of units after 1 year of purchase.

Q. Is there any lock-in period for investment in this scheme?

Ans. No. Investors can redeem their investment as per their wish and needs. However, as mentioned, exit load of 1% will be applicable if redeemed before 365 days.

Q. What is the fund manager’s style of investment?

Ans. R. Janakiraman and Hari Shyamsundar have been managing the fund since 2013 and 2016 respectively. It has given consistent returns and thus dividends under their management and has outperformed the benchmark.