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

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

WEALTH TAX

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 WEALTH TAX   WHAT CONSTITUTES WEALTH? For wealth tax purposes, "wealth" means property , urban land, car, jewellery , yacht, boat, aircraft and cash in hand in excess of Rs 50,000. CAUTION POINT | Do not think you will have an easy escape from wealth tax by transferring your `wealth' without consideration to your spouse or minor child. Such assets will also be considered as your wealth. HOW TO DETERMINE YOUR TAXABLE WEALTH Add the taxable value of the above assets (computed as per the detailed rules for valuation) owned by you as on March 31 (for FY 2014-15, it will be March 31, 2015). In case you sold your car during the year, it will not be taxable wealth. Deduct loans if any obtained by you to acquire any of the taxable assets from the value of gross tax out for at least 300 days in a...

Equity Savings Fund

Invest Equity Savings Fund Online   The best part about these funds is that they are subject to equity fund taxation and at the same time are structured like MIP like funds . This new category, equity savings funds , offer a little of everything. They allocate money to equities & equity related instruments, and fixed income. They aim to generate returns by diversification. Such funds invest in fixed income and arbitrage to protect the investors from short term volatility and equity for capital gains. The best part of these funds is that they are subject to equity fund taxation and at the same time are structured like MIP funds.   MIP funds however are subject to debt fund taxation. Investors Equity savings funds are suitable for the following: First time investors who seek partial exposure to equity with less volatility and greater stability Investors seeking moderate capital appreciation with relatively lower risk Those wh...

How to Pick Top Performing Mutual Fund Schemes

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   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

8% Government of India Bonds quick guide

For those seeking comfort in safety of returns, the Government of India issued 8% savings bond once again comes to the fore. First launched in 2003, these bonds are issued by the government with a maturity of 6 years. The bonds are available at all times with specified distributors through whom you can apply to invest in them. Here is a quick guide to what the bond offers and its features to ascertain to check for suitability. What are Government of India bonds Government of India bonds are like any other government bonds with specified rate of interest. The rate is fixed at 8% per annum paid half yearly, or you can opt for cumulative payment of interest at the end of the tenure. You can buy these bonds from State Bank of India and its associates, other nationalized banks and some private sector banks such as HDFC Bank Ltd and ICICI Bank Ltd, among others. The bonds can be bought from the offices of Stock Holding Corporation of India as well. They are available in physical form onl...
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