Franklin India Bluechip Fund - Rating & Review - Above Average Performer

Franklin India Bluechip Fund – Rating & Review – Above Average Performer

Roboadviso     Mutual Funds Rating     Posted On, Thu 10th August, 2017     2 comments
Rate
  • Editor Rating
  • Rated 3 stars
  • 60%

  • Franklin India Bluechip Fund
  • Reviewed by:
  • Published on:
  • Last modified: August 10, 2017

Franklin India Bluechip Fund Rating Review

Franklin India Bluechip Fund aims for fast growth with focus on appreciation of capital in the medium to long term period via investments in stocks of high quality companies that are well-established and relatively large-sized.

Presented below is a thorough review of Franklin India Bluechip Fund. It will offer you with all the relevant information required by you so as to make an informed choice about whether to buy, sell, or hold this fund.

Basic costs and other information:

Franklin India Bluechip Fund was launched on Dec 01, 1993. It has remained a successful scheme for more than 20 years now and investors continue to reap rich rewards. As of Jun 30, 2017, this equity-focused fund has assets of INR 8,553 crores. The minimum required investment for lump sum investment route is INR 5,000, while it is INR 500 in case of SIP or Systematic Investment Planning method.

The expense ratio as of Jun 30, 2017 is 2.21 percent. If investors redeem their fund investment within a period of one year or 365 days of holding it, then the exit load is 1%.

Anand Radhakrishnan has been the fund manager since April 2007. He was joined by Roshi Jain and Srikesh Nair in May 2016. Mr. Radhakrishnan has a B.Tech degree and a PGDM from IIM Ahmedabad. He is also a CFA. Before joining Franklin Templeton Investments, he has worked at Asian Convertible and Income Fund, SBI Funds Management, and Sundaram Asset Management Ltd. Ms. Jain is a PGDM, a CFA, and an ACA. Before joining Franklin Templeton, she worked at Goldman Sachs, Singapore; Goldman Sachs, London; S. R. Batliboi & Co; and Wipro Ltd. Mr. Nair has a Bachelor in Science degree for Marine Engineering from BITS Pilani. He has completed his PGDM from Gurgoan’s Management Development Institute.

Allocation of the fund

As of Jun 30, 2017, the fund’s allocation stands as 93.02 percent in equities and 6.96% in Cash/Call.

As of Jun 30, 2017, the top 6 sectors that the fund’s portfolio focuses on include Banking/Finance (31.06%), Automotive (10.91%), Pharmaceuticals (8.66%), Technology (8.05%), Engineering (5.73%), and Cons Non-Durables (5.12%).

As of Jun 30, 2017, the top 6 stocks that make up the fund portfolio include HDFC Bank (9.66%), ICICI Bank (5.04%), Larsen & Toubro (4.14%), Yes Bank (4.02%), Infosys (4.02%), and Bharti Airtel (3.91%).

Performance

As of Aug 04, 2017, Franklin India Bluechip Fund has produced a 11.61 percent return per annum on investment in the last 10-year period. This shows that the fund beat the category average of 9.90 percent for the same period. From the time of launch the fund has delivered 21.77 percent per annum returns.

In the past 1, 3, and 5 years, the fund has shown 16.23, 14.00, and 16.17 percent returns. Thus the 3-year returns of the fund are nearly 2% points better than the category returns. On a 5-year period, the performance of the fund vis-à-vis the category is almost the same.

If the topmost holdings are taken into consideration, then it can be said that the Franklin India Bluechip Fund heavily leans towards the banking and finance sector. As per data of the past 3 years, the fund’s standard deviation, i.e., the volatility of the returns of the fund vis-à-vis its average, is 12.68% as of 31st July 2017. This is lower than the category average which is 13.61% for the same period. 

When the returns of Franklin India Bluechip Fund are compared with its peers during the past 5 year period, then at 16.17 percent returns it has not done as well as other similar funds like Birla Sun Life Frontline Equity Fund (20.27%); DHFL Pramerica Large Cap Fund (17.45%); Kotak 50 Regular Plan (16.95%); and SBI Magnum Equity Fund (16.73%). However, when looking at the fund’s returns from a 3-year perspective, then other funds in the category show returns which are similar or marginally better than Franklin India Bluechip Fund returns of 14.00%.

Analysis

Franklin India Bluechip Fund is its category’s first mover. The outperformance margins of the fund as compared to the benchmark and category has widened over the past 1 and 3 years. The consistency of the scheme has allowed it to retain its 3 to 4 star rating right from the time of launch.

The management style of the fund is GARP, i.e., growth-at-a-reasonable-price along with a solid portfolio consisting of high-conviction investments.

The fund does not deviate from its portfolio allocation of over 90 percent to large caps. This fact and the choice of quality stocks may sometimes cause the performance to lag, but it also plays a major role in overcoming market volatility and giving sustained performance in the long term. The portfolio has 5 to 10 percent of investment in mid caps, while small caps have never been a part of the portfolio.

Barring the aberration of 2013, Franklin India Bluechip Fund has comfortably beaten the benchmark in 9 of the last 10 years. The 5 and 7 year returns of the fund are 3% to 4% points above the index, while its 3 year returns outpaces the benchmark by 7% points. Due to the fund’s unwavering focus on large cap investments, it has not been a big performer in its category over the years. It has however managed to outpace its category peers in the past 3 years.

The fund has been known to weather bear and choppy markets. It is therefore a good option for investors who invest conservatively.

Should I sell, buy, or hold?

Franklin India Bluechip Fund is a scheme which offers good payoffs as compared to the level of risks involved. It has offered powerful and consistent performance for several years, which makes it one of the market leaders in its category. A dividend has been declared by the fund every year, for the past 19 years!

New Investment is not recommended in the fund and existing investors can continue to stay invested in the fund and watch the performance.

*Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing.

Pros

Good Fund Manager
Excellent Fund House
Good Consistency
Excellent Fund Size

Cons

Above Average Performance
High Expense Ratio

Dream Big – Best book on Mutual Fund Investment to Grow Rich

Learn to Invest Right & Grow Rich

CNBC TV18 has published the book ‘Dream Big’ which has been authored by Dr. Mukesh Jindal.

'Dream Big' is a Bestseller which can help you in learning all about investments and making right investments to grow your wealth.

Order Your Copy Now - Amazon

Related Post

  1. This is one nice analysis of the fund.
    I am looking forward for the MF screener based on your ROBO advisory considering all the Pros and cons as stated in above analysis. The parameters used in this analysis like cost, asset allocation,performance, analysis . is there any other parameters which are measurable and comparable? Please throw light on those and looking forward for MF screener tool.
    Such as followings – https://www.portfoliovisualizer.com/examples
    http://portfolio.morningstar.com/RtPort/Free/InstantXRayDEntry.aspx

     
    • Hey Dilip
      Thanks for sharing the feedback. The parameters used for rating the fund have all been used in the article. Will definielly work on incorporating the MF Screener. Thanks a lot for sharing the links. Have a good day.

       

Leave a Reply


DOWNLOAD THE APP