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Friday, December 11, 2015

Franklin India Tax Shield Fund Review

 

Franklin India Tax Shield Fund - Invest Online

Franklin India Tax shield Fund is open ended fund was launched in the year 1999 on April 10. It is benchmarked against CNX 500 and managed by ANAND RADHAKRISHNAN and ANIL PRABHUDAS.

Franklin India Tax shield FundNature of investment:

Majority of the assets are invested in equity stocks and the rest are assigned to the PSU bonds, debentures and other debt related instruments. During recession, the investments in the debt funds come into play as they provided minimum guaranteed returns to the investors.

Performance:

Franklin India Tax shield FundThe one year growth rate of the fund is about 18.46% which is quite higher than the 8.125 offered by the CNX 500. It is one of the primary reasons to invest in the scheme. Take a look at the 3 year growth program and not surprisingly the figures are far better than the benchmark. For 3 years the fund has registered impressive returns of 23.77%. Moreover, the 3 years figure for the CNX 500 is only 15.18.

Comparison with peers:

Compared with the peers, the fund is not the best performer. Its growth for 1 year is far less than Birla Sun life tax plan and Birla Sun life tax relief 96. Both of them have provided returns in excess of 20%. Franklin has outperformed the ICCI prudential fund returns of 9.66%. On a 5 year basis, Franklin has beaten all the schemes as its growth of 14.47% is the highest. In fact as far as performance is concerned, the fund ranks 2nd in its category.

Risk factor:

The quality of the Franklin India Tax shield Fund should not only be measured by the growth factor but also the risk factors. To begin with, the Franklin fund shows a standard deviation of 13.56% which is less than the 14. 47% figure of the benchmark. Sharpe ratio is 1.10 making it on the higher side when compared to the 0.50 of the CNX 500. As far as the standard deviation is concerned, the fund ranks 29th in the category. Investing in the scheme is relatively safe as the prices do not fluctuate wildly.

Portfolio:

Let's analyze what the stock is made up of.

 

The total market capitalization of the fund is about 50,765 CRORE which is way higher than the category figure. About 48.64% of the assets are invested in the Giant cap segment while 23.15% cater to the large stocks. To increase returns, more than 23% is invested in the Mid cap segment however the fund has limited exposure to small companies. One can safely say that the fund is not very keen on investing in the start ups.

Some of the holdings are given below:

HDFC Bank

Infosys

Indusind Bank

ICICI Bank

Bharti Airtel

Dr. Reddy's Lab

Conclusion: The Franklin India Tax shield Fund has always maintained its star status and is consistently being valued as 4star fund for the past 5 years. It focuses on investing in large or emerging large cap stocks to ensure decent returns even in the environment of inherent risks. During the bear phase, the fund has performed extremely well however in the bull phase it has lagged behind its peers. If you are a conservative equity investor, this one is for you.

Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. IDFC Tax Advantage (ELSS) Fund

4. ICICI Prudential Long Term Equity Fund

5. Religare Tax Plan

6. Franklin India TaxShield

7. DSP BlackRock Tax Saver Fund

8. Birla Sun Life Tax Relief 96

9. Reliance Tax Saver (ELSS) Fund

10. HDFC TaxSaver

Invest Rs 1,50,000 and Save Tax under Section 80C. Get Good Returns by Investing in ELSS Mutual Funds Online

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