Skip to main content

Mutual Fund Review: Templeton India Equity Income Fund

 

ENDORSING the conservative stratagem of investing, Templeton India Equity Income Fund is designed to invest in companies that have current or potentially attractive dividend yield both in India and overseas markets. It is thus one of the few schemes in the country to give the investor a global exposure in investments. Launched in May 2006, the scheme now manages an asset base of over 1,100 crore.

PERFORMANCE:

Benchmarked to BSE 200 equity index, Templeton India Equity Income has so far turned out to be an outperformer in both good and bad times. The very first year of its launch — 2006 — saw the fund beat its benchmark by a neat 7% margin. The fund returned about 18% gains during the first seven months of its launch against 11% returns by the BSE 200.

 
   While it did appear to slow in pace vis-à-vis its peers in one of the most happening years of the decade, 2007, generating about 57% returns in that year against over 60% hike recorded by the BSE 200, Templeton India Equity Income was quick to salvage its gait in the following years.


   While the financial meltdown of 2008 saw the fund's assets wane by about 52% against BSE 200's 56%, the recovery period of 2009 saw the fund bloom with more than 104% gains against BSE 200's 88%. Even amid the volatile times of 2010, this scheme has been able to maintain its calm and return about 24% gains against BSE 200's 16%.


   Thus, so far, the fund has earned about 115% absolute returns for its investors since the time of its launch against BSE 200's 72% absolute returns during the same period. This implies that every 1,000 invested into Templeton India Equity Income Fund in May 2006 is worth 2,150 now.

PORTFOLIO:

A brief review of the fund's portfolio since 2006 is bound to amuse one and all, for the scheme has hardly reshuffled the domestic composition of its portfolio ever since it was first incorporated in May-June 2006. The scheme currently has about 66% of its assets invested in Indian equities, diversified to incorporate about 23 odd stocks. Of these, nearly 83% of the stock composition is as old as 2006-07 and can thus be credited to have reaped in the gains of long-term investing for the investors. The only new entrants to the scheme are ING Vysya Bank, Coal India, MOIL, and    Usha Martin.


   It is also worth mentioning that while the fund's objective contemplates investment in stocks with good dividend yield, the fund's current portfolio does little justice to the stated objective. Except for stocks like HCL Infosystems, JK Cement and Gujarat Gas Company which have a reasonable dividend yield ranging from 3-7%, all other stocks holdings in the portfolio have dividend yields of less than 3%.


   Notwithstanding the fact that Templeton India Equity Income Fund has more or less a static portfolio as far as domestic equities are concerned, the fund nevertheless appears quite active in managing its overseas investments. An international fund manager can be acknowledged to be a prime reason for such an investment activity. Templeton India Equity Income Fund is managed by the noted global investment guru J Mark Mobius.

OUR VIEW:

International investing has not found much favour with Indian investors so far, especially after the financial crisis of 2008. This is despite the fact that international funds are a catalyst to diversify investments geographically. Performance is another reason for the failure of these funds to
appeal to masses.


   However, Templeton India Equity Income Fund's performance, so far, has been impressive. Moreover, its conservative approach towards investment, especially as far as domestic equities are concerned, makes it less risky and thus, suitable for investors who do not seek over-ambitious returns from their mutual fund investments. Those looking for some global exposure and diversification across boundaries should consider investing in Templeton India Equity Income Fund.

 

Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...

ICICI Lombard to provide weather cover in 10 states

ICICI Lombard General Insurance Company has been given the mandate to provide weather-based crop insurance for rabi season (2010-11) in Madhya Pradesh, Bihar,Tamil Nadu, Karnataka, West Bengal, Chhattisgarh, Jharkhand and Himachal Pradesh.    The insurance company will cover 69 districts — 30 loanee districts (farmers who have taken loans) and 39 non-loanee districts. The major crops that ICICI Lombard covers for the season are winter paddy, cotton, wheat, mustard, barley, maize, onion, potato, tomato, lentil, peas, arhar, jowar, fenugreek, coriander, cumin, methi, isabgol, brinjal among other crops.    Weather-based crop insurance provides cover against weather-related risks such as excess or deficit rainfall, variations in temperature and fluctuations in humidity. This scheme facilitates immediate compensation based on certified data collected from independent third party bodies such as Indian Meteorological Department ( IMD ) and National Collateral Management Services Ltd. ( NC...

Mutual Fund Review: Reliance Regular Savings Balanced

Reliance Regular Savings Balanced fund has shown great resilience during market crash After a shaky start, this fund has established itself as a strong contender in this space. In the past three years it has ridden the market well by not only delivering during the market run-ups but also displaying resilience during the crash. In 2008, it witnessed the second lowest fall among its category and last year it was amongst the top three performers with a return of 76 per cent (category average: 61%).   The poor underperformance in 2006 can well be credited to the low equity allocation of the fund, which stood at just over 10 per cent for only four months that year. Though the fund has the leeway to go up to 75 per cent in equity, it has never touched that limit. In fact, it has exceeded 70 per cent in just five months in its entire history. During the crash of 2008, the fund managers had no problem going right down to 54 per cent (equity exposure). Fund managers Omprakash Kukian and A...

Feeder funds are the cheapest way to invest in gold

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India)   There are four ways to put your money in gold — buying physical gold/jewellery , putting money in gold exchange-traded funds ( ETFs ), investing in a gold savings fund and going for the National Spot Exchange's e-gold. Now, some gold ETFs and e-gold even allow taking physical delivery of gold at the end of investment tenure. That might sound good if you wish to possess physical gold. But, given the firm price of gold today (almost ~31,000 per 10g), it is important that gold is bought through acost-effective avenue. Reason: Investing comes at a price. Add to that, India's gold buying is expected to decline in 2012 and 2013, according to the latest World Gold Council ( WGC )report. WGC Director Vipin Sharma feels gold imports may drop to 800 tonnes from 967 tonnes last year. And the mix between the jeweller...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now