Top Funds: Franklin India Prima Fund

Objective

Franklin India Prima Fund-Growth is a Mid Cap mutual fund scheme from Franklin Templeton Mutual Fund.

It is an open-end growth scheme with an objective to provide medium to long term capital appreciation as a primary objective and income as a secondary objective.

Fund Highlight

This fund has been in existence for 29 years, having been launched on October 1993.

Franklin India Prima Fund has ₹7,787 Crores worth of assets under management (AUM) as on December 31 2021 and is medium-sized fund of its category.

The fund has an expense ratio of 1.85%, which is higher than what most other Mid Cap funds charge.

The expense ratio of the fund is 1.88% for Regular plan as on Oct 31, 2021.

The scheme attract exit load of 1% if redeemed within 1 year.

Minimum investment required is Rs 5000 and minimum additional investment is Rs 1000. Minimum SIP investment is Rs 500.

It is benchmarked against NIFTY Midcap 150 Total Return Index.

The fund largely follows a Blend oriented style of investing and invests across market capitalisations - around 28.15% in giant & large cap companies, 67.06% in mid cap and 4.78% in small cap companies.

Returns

Franklin India Prima Fund returns of last 1-year are 25.89%. Since launch, it has delivered 19.48% average annual returns. The fund has doubled the money invested in it every 2 yrs.

Its trailing returns over different time periods are: 36.46% (1yr), 17.85% (3yr), 14.87% (5yr) and 19.53% (since launch). Whereas, Category returns for the same time duration are: 47.69% (1yr), 22.14% (3yr) and 16.8% (5yr).

Sector and stock-wise holding

The fund has the majority of its money invested in Financial, Chemicals, Construction, Services, Consumer Durable sectors. It has taken less exposure in Financial, Chemicals sectors compared to other funds in the category.

The fund's top 5 holdings are in Crompton Greaves Consumer Electricals Ltd., ICICI Bank Ltd., Voltas Ltd., Deepak Nitrite Ltd., HDFC Bank Ltd

Tax Implications

1. Gains are taxed at a rate of 15% (Short-term Capital Gain Tax - STCG) if units are redeemed within 1 year of investment.

2. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.

3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long-term Capital Gain Tax - LTCG).

4. For Dividend Distribution Tax, the dividend income from this fund will get added to the income of an investor and taxed according to his/her respective tax slabs.

5. Also, for dividend income in excess of Rs 5,000 in a financial year; the fund house shall deduct a TDS of 10% on such income.

Fund manager

The Franklin India Prima Fund is managed by Krishna Prasad Natarajan (Since Aug 30, 2021), Srikesh Nair (Since May 02, 2016) and R Janakiraman (Since Feb 11, 2008).

Expert Comment

This fund is suitable for investors who are looking to invest money for at least 3-4 years and looking for high returns. At the same time, these investors should also be ready for possibility of moderate losses in their investments. This is a fund that invests in medium-sized companies, while compared to those that invest in larger companies, such funds tend to fall more when stock prices fall. So while you can expect higher returns in the long term, there will be more severe ups and downs along the way. The scheme's ability to deliver returns consistently is in-line with most funds of its category. Its ability to control losses in a falling market is below average.