- Editor Rating
- Rated 4 stars
- Franklin India Prima Plus Fund
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Franklin India Prima Plus Fund scheme seeks to offer capital appreciation along with regular/periodic dividend via a portfolio made up of debt, equity, and money market securities with increased focus on wealth generating companies across all ranges of market capitalization and sectors.
Presented below is a comprehensive review of this mutual fund that will provide you with all the required information that you need to make a better choice about whether to buy, sell, or hold this fund.
Basic costs and other information
Franklin India Prima Plus Fund was launched on Sep 29, 1994. It has thus been in the business for more than two decades and has remained a big success. As of Jun 30, 2017, this equity-focused fund has assets of INR 11,027 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 2.22 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 R Janakiraman in Feb 2011.
- Radhakrishnan has a B.Tech degree, is a CFA, and has also done PGDM from IIM Ahmedabad. Before joining Franklin Templeton Investments, he was working for SBI Funds Management, Sundaram Asset Management Ltd., and Asian Convertible and Income Fund. Other funds managed by him include Franklin India Technology Fund; Franklin India High Growth Companies Fund; Franklin Build India Fund; Franklin India Bluechip Fund; Franklin India Dynamic PE Ratio Fund of Funds; Franklin India Multi Asset Solution Fund; and Franklin India Life Stage Fund of Funds 20s/Franklin India Life Stage Fund of Funds 30s/Franklin India Life Stage Fund of Funds 40s/Franklin India Life Stage Fund of Funds 50s Plus/Franklin India Life Stage Fund of Funds 50s Plus – Floating Rate.
- Janakiraman has done his Bachelors in Engineering and a PGDM in Business Management. Before joining Franklin, he has worked for Citicorp Information Tech Ltd., Indian Syntans Inv. Pvt. Ltd., and UTI Securities Exchange Ltd. Other funds managed by him include Franklin India Prima Fund; Franklin India Flexi Cap Fund; Franklin India Opportunities Fund; Franklin India Smaller Companies Fund; and Franklin India Taxshield Fund
Allocation of the fund
As of 30 June 2017, the fund’s allocation stands as 94.44 percent in equities, 4.51% in Cash/Call, and 1.06% in other instruments.
As of 30 June 2017, the top 6 sectors that the fund’s portfolio focuses on include Banking/Finance (29.35), Automotive (12.19), Pharmaceuticals (9.45), Technology (7.36), Engineering (6.03), and Cons Non-Durables (5.12).
As of 30 June 2017, the top 6 stocks that make up the fund portfolio include HDFC Bank (8.69), ICICI Bank (4.72), Yes Bank (3.85), Infosys3.71), Larsen & Toubro (3.55), and Bharti Airtel (3.51).
As of August 04, 2017, Franklin India Prima Plus Fund has produced a 13.46 percent return per annum on investment in the last 10-year period. This shows that the fund beat the category average of 11.79 percent for the same period. From the time of launch the fund has delivered 19.29 percent per annum returns.
In the past 1, 3, and 5 years, the fund has shown 18.40, 17.74, and 20.83 percent returns. Thus the 3-year returns of the fund are nearly 2% points better than the category returns for the same period. On a 5-year period, the outperformance margins of the fund vis-à-vis the category is also slightly better.
If the topmost holdings are taken into consideration, then it can be said that the Franklin India Prima Plus 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 Jul 31, 2017. This is lower than the category average which is 14.10% for the same period.
When the returns of Franklin India Prima Plus Fund are compared with its peers during the past 5 year period, then at 20.83 percent returns it has not done as well as other similar funds like Birla Sun Life Advantage Fund (25.09%); Birla Sun Life Equity Fund (23.92%); and DSP BlackRock Opportunities Fund (22.27%), while its performance is equal to SBI Magnum Multiplier Fund (20.84%) during this period. However, when looking at the fund’s returns from a 3-year perspective, then other funds in the category show returns which are only 2 to 3 percentage points better than Franklin India Prima Plus Fund returns of 17.74%.
For most periods during the last 5 years, Franklin India Prima Plus fund has successfully maintained a 4 or 5 Star rating. There has been minor deceleration with regards to performance and growth in comparison to the category and this has caused the ratings of the scheme to drop from 5 Stars to 4 Stars.
The more than 20-year veteran in the category has 65 to 75 percent investments in large caps, 20 to 30 percent in mid-caps, while a small percentage is allocated to small caps. The fund thus seeks for growth at reasonable valuations. Franklin India Prima Plus fund currently is biased to large caps with 75 percent being allocated to it. The remainder of the portfolio is invested in mid caps.
Investments by the fund are primarily in companies with scope of wealth creation and whose competitive leads are mostly likely to turn into higher return on capital. Investments are based on not just the past record of the firms, but also on their capacity to create wealth over a long period of time and their strategies and plans for the future. Cash calls are usually avoided by the scheme.
Investments in large caps have been more as compared to the category peers. Over the past 1 year, allocation to large caps has been increased to around 6 percent of the fund portfolio. The 3 and 5 year returns of the fund are higher than the category returns by 2 to 3 percentage points and by 5 to 7 percent when compared to the benchmark.
The losses in each bear market have been contained a lot better by the fund as compared to the category. However, it has fallen behind the benchmark during the 2007 and 2009 bull market runs. This can be attributed to the fund’s aversion to participate in high value momentum plays.
Should I sell, buy, or hold?
Franklin India Prima Plus Fund has delivered consistent and strong performance for the past many years. This makes it one of the top leaders in the category. It is a reliable fund which will deliver and perform over market cycles. Those who want to invest in this fund should have an investment horizon which spans a market cycle.
We give it our approval and our suggestion to all investors is – “Buy.”
Good Fund Manager
Excellent Fund House
Excellent Fund Size
High Expense Ratio