The Hindu Business Line : Franklin India Taxshield: Hold

Franklin India Taxshield (FITS) investors can retain their investment since its three- and five-year returns are fairly good, at 47 per cent and 44 per cent respectively. The fund consistently outperformed its benchmark Index CNX-500 for the same period by a good margin. However, it is not among the top five performing funds. Franklin Taxshield has a mixture of large-cap and mid-cap stocks in its portfolio.

For the past few years its holding in stocks whose market capitalisation is less than Rs 4,000 crore was restricted to about 30 per cent. The tilt towards large-cap stocks appears to be a better bet for conservative investors. This may be one of the reasons it has not able to generate returns compared to such peers as HDFC Tax Saver and Magnum Tax Gain.

Both of them generated better returns due to the presence of small-cap stocks. Moreover, the pull-back from the correction was better with both these funds than in FITS. Fresh investments, however, can be considered if it is through the SIP mode, since, in this case, the return generated is at par with its peers.

Performance: Its one-year performance is similar to the benchmark CNX-500.Despite the presence of large-caps, the fund has underperformed its benchmark for the past six months and has failed to generate a positive return. In the same period Magnum Tax Gain and Franklin India Index Tax Fund were able to register a positive return.

Portfolio Overview: The fund has 28 stocks in its portfolio and the top three sectors account for 38 per cent of the assets. The fund occasionally takes measured exposures to select stocks. The top ten stocks corner 48 per cent of the assets. The fund is actively managed and books profits periodically in its holdings.

Fund facts: Franklin India Taxshield was launched in April 1999. Mr Satish Ramanathan manages the fund. Its asset size is Rs 308 crore.

More Stories on : Mutual Funds | Recommendation

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page