The Hindu Business Line : Franklin India Opportunities: Invest

A focus on the right sectors has helped the fund do well. It can be added to diversify your portfolio, but need not form part of your principal holdings.

Investors looking to add to their portfolios a blend of large-cap and mid-cap stocks can consider the Franklin India Opportunities Fund.

The fund, earlier known as Franklin Internet Opportunities, was re-positioned as a diversified fund in March 2004. Since then, it has performed impressively, aided by a focus on the right sectors.

The fund has figured at the top of the performance charts in the last 30 months. While its track record as a diversified fund is limited, the fund manager's reputation inspires confidence. Franklin Opportunities is one of the better performing funds in the Franklin Templeton fold, thanks to its unrestricted management style.

It can be added to diversify your portfolio, but need not form part of your principal holdings. Its risk profile is similar to that of a typical diversified fund.

Over the past year, the fund delivered a return of 59 per cent, trouncing the 51 per cent return of the BSE-200. It outperformed the BSE-200 in 16 of the last 24 months — more than 65 per cent of the time.

The flexibility to invest in a mix of large- and mid-cap stocks has enabled it to outperform sister funds such as Franklin Bluechip and Franklin Prima, which have a stricter mandate. The fact that it has raced ahead of large-cap funds such as Bluechip, HDFC Top 200 and Kotak-30 at a time when large-caps have been at the forefront of the rally suggests a superior selection of mid-cap stocks.

Some of its mid-cap choices have delivered handsome returns. Amara Raja Batteries, Television Eighteen and Jaiprakash Associates, in particular, made a difference over the past year. Investments in the construction and media sectors paid off.

The presence of mid-caps in the portfolio did lead to a sharper knock in performance during the market correction; about 30 per cent of the portfolio is invested in stocks with a market cap of less than Rs 2,000 crore.

Despite this, Franklin Opportunities still remains in the top 10 on the performance charts.

Portfolio view: With an asset base of about Rs 450 crore, FIOF is one of the smaller funds under Templeton's management.

It takes measured exposures in stocks, with the top 10 accounting for more than 60 per cent of the assets.

Construction sector is its largest holding, accounting for 16.5 per cent. Auto, banking and media are other sectors that figure prominently in the portfolio.

The portfolio is churned quite actively.

The fund replaced about 60 per cent of its portfolio over the past year.

It appears to have made a timely exit from stocks such as Murudeshwar Ceramics, Rallis India and IPCA labs, which were in its portfolio last September.

Fund facts: The minimum investment amount is Rs 5,000.

The fund offers dividend and growth options. The fund manager is Mr K.N. Sivasubramanian.

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