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Aarati Krishnan

THOUGH less clearly focussed than the large-cap Bluechip Fund or the mid-cap oriented Prima Fund, Franklin India Prima Plus has a reasonable track record over a five-year period, with a compound annual return of about 28 per cent, which has been earned fairly consistently over the five years.

Investors can thus consider taking exposures in the fund. The fund's long-term track record is not as good as that of Bluechip Fund, HDFC Equity Fund or Alliance Tax Relief; therefore, investors may use the fund as an option to diversify their portfolio.

The recent fall in stock values has lowered the degree of downside risk associated with equity values. However, valuations levels have certainly surged over the past year, enhancing the level of risk associated with investing in stocks. It may thus be prudent for investors to take their exposure to equity funds in phases, instead of investing a large lumpsum at one shot.

Suitability: Franklin India Prima Plus carries the normal equity risks of a diversified fund and is suitable for investors willing to assume such risks. It features a mix of large- and mid-cap stocks with no consistent affinity towards either class.

Save for the year 2000, the fund has handled bearish phases in the market well. It is among the few funds to have generated a positive return in the first quarter of 2004.

Performance: The fund's compounded annual returns of 28 per cent over the past five years, are slightly inferior to that of the large-cap focussed Bluechip Fund, which managed about 31 per cent.

Given the composition of its portfolio, which carries quite a few mid-cap stocks, its returns ought to have better than that of Bluechip Fund. However, the fund has fared reasonably well in terms of consistency of returns.

Save for a sharp reversal in 2000, it has beaten indices such as the Nifty in four of the past five years. It has also handled the recent "correction" well, registering a positive return of 1.4 per cent in the first quarter of 2004, against the 12 per cent decline in the NAV of Prima Fund and the 3 per cent appreciation in the Bluechip Fund's NAV.

In portfolio composition, the fund has toned down its exposure to banking and technology stocks in the month of March, making use of profit-booking opportunities.

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