Skip to main content

Mutual Fund Review: Templeton India Growth Fund

 

 

Templeton India Growth Fund (TIGF) is the first scheme from the house of Franklin Templeton Investments in India (launched in September 1996) and is currently managed by Dr Mark Mobius. TIGF is a diversified equity fund with assets under management of Rs 608 crore as of May 2010. The fund is part of the CRISIL~CPR under the diversified category and has been ranked CRISIL~CPR 1 in the last two quarters. Over the past five quarters, it was top ranked in three and CRISIL~CPR 2 in the remaining quarters. The CRISIL~CPR 1 rank indicates that it is within the top 10 per cent of its peer category owing to a combination of superior performance and good portfolio management.

Investment style TIGF follows a "Value Style" of investing. A value fund invests in stocks that are underpriced according to fundamental measures. Assuming that a company's share will not remain undervalued indefinitely, the fund acquires the shares before the expected upturn. Value funds tend to focus on safety rather than growth, and often opt for stocks that are likely to provide both dividends and capital appreciation. They invest in companies with low price-earnings (P/E) ratios as well as in stocks that have fallen out of favour with mainstream investors owing to factors like changing preferences, poor quarterly earnings, or downturns in a particular industry.

Value funds discover and invest in undervalued stocks, and hold on until the market recognises the stocks' intrinsic values. The focus is to invest in securities with potential for long term growth rather than high-performing securities according to the current market trends.

The value investing principle was established by Benjamin Graham and David Dodd, both professors at Columbia Business School in the early 1930s. The most high-profile proponent of value investing is Warren Buffett, chairman, Berkshire Hathaway.

The fund's value style of investment is evident from the fact that it demonstrates low level of churning in the portfolio. The fund does not rely on active cash calls and generally remains fully invested. For instance, for most of 2008 when equity markets were volatile, the fund had on an average 95 per cent of assets in equities and equivalent. In the May 2010 portfolio, the fund had close to 25 per cent of its stocks which have been held for over 5 years. The average holding period of stocks in the latest portfolio is almost 3 years.

Good performance TIGF's performance on risk-adjusted return relative to its peers is high and is one of the key factors for propelling its performance to CRISIL~CPR 1. The scheme has managed to consistently provide positive alpha over longer time frames through value investing. The scheme has adequately rewarded its long-term investors with 20 per cent CAGR returns since inception (almost 14 years) vis-à-vis close to 13 per cent CAGR returns by the benchmark index (BSE Sensex). An investment of Rs 1,000 in the scheme at the inception has appreciated 13 times to Rs 12,700 vis-à-vis Rs 5,102 in the benchmark index.

In the five-year and 10-year time frames, too, the fund has outperformed the Sensex having delivered 24 per cent and 23 per cent, vis-à-vis the Sensex's 20 per cent and 14 per cent, respectively.

Even in the last 1-2 years, the fund benefited from the broad based rally in stock prices owing to its ability to pick value stocks during the market downtrend. Over the past 2 years, the fund gave 22 per cent CAGR returns compared to 15 per cent by the benchmark index. The fund though has underperformed its benchmark index in shorter periods (1-month and 3-month). However, it is important to note that equity funds must always be looked at from a long term perspective.

Well diversified The fund maintains an optimally diversified portfolio across market capitalisations with a slight bias towards large-cap stocks. The allocation to large-cap stocks has, however, reduced considerably over the past two years from around 60 per cent during the peak of early 2008 to 35 per cent following recovery in the stock market. The fund has maintained investments in around 30 stocks across 20 sectors over along period of time to avoid the risk of over diversification.

Over the last 3 years, banks, refineries and investment companies account for around 28 per cent of its portfolio reflecting the fund manager's view on the long-term potential of these sectors.

 


Popular posts from this blog

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...

Am you Required to E-file Tax Return?

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   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Merger of Tata Indo-Global Infrastructure Fund with Tata Equity Opportunities Fund

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 Merger of Tata Indo-Global Infrastructure Fund with Tata Equity Opportunities Fund Tata Mutual Fund has decided to merge Tata Indo-Global Infrastructure Fund with Tata Equity Opportunities Fund, with effect from January 16, 2015.   Investors of Tata Indo-Global Infrastructure Fund can redeem/ switch out units from December 13, 2014 to January 12, 2015 without paying any exit load. 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 answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund A...

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...
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