Three of the large-cap funds from Franklin Templeton are rated Gold by fund analyst Himanshu Srivastava.
The common denominator in all is the bias for quality growth stocks and its fund manager Anand Radhakrishnan. He is a skilled manager and a proficient stock picker who has built an impressive track record over the years. He is supported by a strong and stable investment team that ranks among the best in the industry.
The investment approach is team driven and research intensive, where the focus is on identifying businesses with clean balance sheets, strong business models, sustainable competitive strengths and high corporate governance standards. Though Radhakrishnan looks for companies with sustainable growth prospects, he is fairly valuation-conscious and is willing to stay away from issues he believes are overvalued.
In the case of Franklin India Bluechip, investors must bear in mind that Radhakrishnan’s investment approach can result in significant deviations in the fund’s performance from that of the benchmark index and category peers. That said, the large-cap, quality-driven strategy provides resilience in downturns. It is also noteworthy that Radhakrishnan has chosen to stand by his investment style even when it is out of favour, suggesting a disciplined approach. We believe that his investment style will hold the fund in good stead over a market cycle.
In the case of Franklin India Prima Plus and Franklin India Taxshield, the penchant for concentrated and contrarian bets can expose the fund to above-average volatility and result in a divergent showing versus the norm in the short term. Despite the growth orientation, these funds are not commonplace growth offerings. The manager often displays a rather contrarian streak in his picks. For instance, he has been holding an underweight position in the consumer defensive sector versus the CNX 500 index and the category average for some time as a result of valuation concerns.
Both these funds have fairly identical portfolios, though one is an equity linked savings scheme, or ELSS, which means your money needs to be locked in for at least 3 years to avail of the tax benefit under Section 80C.
To read the analysis in greater detail, click on the funds below.
