The Hindu Business Line : Franklin India Prima Plus: Hold

Prima Plus' portfolio straddles a range of sectors. Its major holdings are in software, capital goods and banking. It is slightly underweight on the auto sector, which could explain some of its underperformance.

Unitholders can retain their holdings in Franklin India Prima Plus. The fund has the mandate to invest across market capitalisation ranges. It, however, has remained predominantly invested in large-cap stocks and maintained a 10-15 per cent exposure in mid-cap stocks or stocks with a market capitalisation of less than Rs 2,000 crore.

With the launch of Franklin Flexicap, which also invests across market cap ranges, this bias towards large-caps is likely to be maintained.

Over the past year, the fund has delivered a return of about 45 per cent, marginally trailing the Sensex. Its performance against broader indices such as the BSE 200 and the BSE 500 compares better, with an 8-percentage point lead.

With a large-cap bias, the fund carries a risk profile that is similar to a typical diversified equity fund. The low exposure to mid-cap stocks, while perking up returns, does not add significantly to risk.

Over a five-year period, the fund has delivered returns that are in line with its well-established sister fund, Franklin India Bluechip.

Given its more relaxed mandate of investing in mid-cap stocks compared to Bluechip's rigid large-cap focus, its returns could have been superior. Over the past year, its returns have trailed that of Franklin Bluechip, which has itself only recently witnessed a pick-up in performance.

While the slight lag could be attributed to the underperformance of mid-cap stocks, its performance also trails the likes of Franklin Flexicap, which has a larger exposure to mid-caps. Reliance Vision, which also sports a similar investment profile, has also delivered stronger returns.

Unitholders may, therefore, consider this fund more as a diversification option. The fund is suitable for those who would like a small exposure to mid-cap stocks, but do not wish to hold a mid-cap fund separately.

Portfolio overview: The fund has an asset base of a little over Rs 600 crore, which is invested in a portfolio of about 40 stocks. The investments are fairly diversified. Its largest exposure is in Infosys, which stands at about 8 per cent of the overall holdings. The top ten stocks account for about 45 per cent of assets.

Prima Plus' portfolio also straddles a wide range of sectors. Its major holdings are in software, capital goods and banking sectors. Together, they account for about a third of the assets. While capital goods has been the top performer, the other two have lagged the market.

Compared to Bluechip and Flexicap, Prima Plus is relatively underweight on the auto sector, which could explain some of its underperformance. The BSE Auto Index has been the strongest performer after that of capital goods, on a year-on-year basis.

Over the past month, the fund has increased exposure to banking and pharmaceutical stocks, which have been gross under-performers over the past year.

Mid-caps now account for less than 10 per cent of assets. Goodlass Nerolac, United Breweries, NDTV and Television Eighteen are some of the mid-caps in its portfolio.

Fund facts: Franklin India Prima Plus was launched in 1994. It offers dividend and growth options. The minimum investment amount is Rs 5,000. The fund managers are Mr Sukumar Rajah and Mr Satish Ramanathan.

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