Mutual Funds

Franklin India Prima Plus: Steady performer - INVEST

Srividhya Sivakumar | Updated on November 19, 2011

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The fund's performance during periods of market downslides adds to its investment attractiveness now.

If you are looking for a fund with a steady track record of performance, especially during periods of market correction, consider investing in Franklin India Prima Plus. The fund, with a predominantly large-cap bias, has beaten its benchmark CNX 500 over one-, three- and five-year periods. Over three- and five-year time frames, it clocked a compounded annualised return of 25 per cent and 9 per cent, respectively, outpacing its benchmark S&P CNX 500 by about three- to five percentage points.

What's more, it has performed equally well against narrower benchmarks such as the Nifty and CNX 100 during the same periods. Nonetheless, it is the fund's performance during periods of market downslides that adds to its investment attractiveness now.

Suitability: Franklin Prima Plus Fund has a reasonably good scorecard during periods of market correction. However, the fund hasn't performed as well during secular bull rallies. This makes it a more suitable addition in the portfolio of investors looking for steady rather than spectacular returns.

Performance: Over the last one year the fund declined by 8 per cent, still containing its losses way better than both its category average and benchmark. Even in 2008, the fund capped its losses at 48 per cent, way better than its category average, without resorting to aggressive cash calls.

A poor performance in 2009, however, kept the fund's three-year returns in check. In 2009, the fund underperformed most peers and its benchmark considerably, thanks to its focus on defensives. For that matter, the fund's performance during market upswings has been rather mixed. While a large-cap bias has helped it participate in most rallies, keeping away from momentum stocks capped the upside.

Portfolio strategy: Though Franklin Prima Plus Fund has a portfolio of 52 stocks, it is not very diverse — the top ten stocks make up more than half of its portfolio, while the top three sectors account for 39 per cent. Large-cap stocks accounted for a chunk (about three-fourths) of the latest available October 2011 portfolio. Exposure to mid-cap stocks was barely 8 per cent, while small caps exposure was somewhat higher at 10 per cent. Stocks such as Shree Cement, Pfizer India and Ashok Leyland are some of the mid-cap picks while media stocks such as TV 18 Broadcast, HT Media, and Jagran Prakashan were seen in the portfolio's small-cap list.

Fund facts: Franklin India Prima Plus was launched in 1994. The fund is co-managed by Mr Anand Radhakrishnan and Mr R Janakiraman.

Published on November 19, 2011

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