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Mutual Fund Review: Franklin India Taxshield
Finance - Mutual Fund

LOOKING for a consistent and steady offering, and value a good night's sleep? This one is for you.

An average performer in rising markets, it has made its mark in downturns. But its longterm track record will keep its investors happy. Its 3-year annualised return of 14 per cent (April 30, 2010), is ahead of the category average of 10 per cent.

The fund manager will not chase performance at any cost.

So sectors riding on a momentum, as was the case in 2007 with metals and construction, will not lead him to bite the bullet. Even if he has to compromise with lower returns.

It 2008 it was the third best performing fund among its category. Instead of resorting to aggressive cash calls (averaged at just 5 per cent), it increased exposure to FMCG and healthcare.

Dabur India, United Spirits, Lupin and Dr Reddy's Laboratories were added to the portfolio and more purchases were made in HUL, Marico and Nestle.

Apart from this, the distinct large-cap bias of the fund came to its rescue. Majority of the fund's portfolio is held over the long term and some of its favourite picks have appeared for a considerable length of time —Infosys, L&T, Grasim Industries, RIL, Cummins India and Marico. The fund manager also takes small positions in large number of stocks which it churns frequently. At present, of the portfolio of 50 stocks, 14 have an allocation of less than 1 per cent each (totalling 8.54% of the portfolio).


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