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Shanthi Venkataraman

INVESTORS can consider exposures in Franklin India Taxshield. The fund has an impressive track record, outperforming the benchmark index, the broad-based S&P CNX 500, consistently over the past five years.

Investors who are not particularly seeking tax saving options may also consider the fund, as its performance is in line with that of other top-performing diversified equity funds.

Investments may be made in a phased manner through the systematic investment plan. This enables investors to benefit from any fall in stock prices. Moreover, as tax plans involve a three-year lock-in period, it may be prudent to avoid making a lump-sum investment.

Suitability: For investors with a risk appetite seeking tax saving options, this fund and HDFC Tax Saver should figure at the top of the pecking order of preferences. The risks associated are higher than a typical diversified fund due to the fund management style.

Franklin India Tax Shield has, in the past, been accustomed to taking concentrated exposures in specific sectors, particularly in the IT sector as well as stocks. While its portfolio has acquired a more diversified flavour over the last year, it continues to have a tilt towards the IT sector. The fund is aggressively managed with its portfolio churned over at least once a year.

Portfolio: The IT sector continues to be top holding of the fund. The fund takes concentrated exposures to stocks. Its top ten holdings account for almost 50 per cent of its assets. The portfolio comprises mainly of large-cap stocks.

Kotak Mahindra Bank, Monsanto, Mphasis BFL and Wockhardt are some mid-cap stocks in its portfolio. The presence of mid-caps and the stock selection in this space may help to enhance returns.

Fund facts: Franklin India Taxshield was launched in 1999. Investors in the fund are eligible for a tax rebate under Section 88 of the Income Tax Act. The fund has an asset base of Rs 104 crore. The minimum amount is Rs 500.

In the case of Systematic Investment Plan, the minimum monthly investment is Rs 1000 for six months and Rs 500 for 12 months.

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