Franklin India High Growth Companies Fund

About Franklin India

Franklin Templeton Asset Management (India) Private Ltd. has been in India for over 20 years now. Setup in 1996, the mutual funds offered by Franklin Templeton have received positive sentiment from the investors.

Franklin Templeton Investments is an American holding company that has multiple subsidiaries around the globe and offers investment options like mutual funds and retirement plans. It has around 600 investment professionals in more than 28 nations all across the world.

About Fund Managers

The Franklin India High Growth Companies Fund is managed by Roshi Jain, Anand Radhakrishnan and Srikesh Karunakaran Nair. Ms. Roshi has been associated with the company since 2005 and became one of the fund’s co-managers in the year 2012, along with Siva Subramaniam. It was in the year 2014 that she became the lead manager of this fund.

The fund managers invest following key valuation parameters like enterprise value, forward price-to-sales ratio, price-to-earnings ratio, and other factors that account for high growth sectors. The scheme has more than 60% holdings in portfolios dedicated to large organizations while 30% is in mid and small size companies.

Entry Load

No entry load is charged to customers, as per Securities & Exchange Board of India (SEBI) guidelines.

Exit Load

1% if the customer opts to redeem/switch-out within a year from the date of allotment. If the investor has purchased the units in the form of SIP, each SIP installment counts as a fresh unit allotment.

Minimum Investment Amount

The minimum investment required is Rs. 5000 for the first instance. Subsequent investments can be in multiples of Rs. 1000. The investor can also opt for a Systematic Investment Plan (SIP) which can be started at Rs. 500 per month.

Redeeming

The investment can be redeemed on any business day and can be received as direct credit in the registered bank account or cheque.

Tax Benefits

Although equity-focused funds are not recommended for tax saving purposes, the Franklin India Focused Equity Fund provides the following tax savings:

• Long term capital gains (LTCG) tax @10% (plus surcharge, if applicable and cess) without indexation if units held for more than 12 months
• Short term capital gains (STCG) tax @ 15% (plus surcharge, if applicable and cess) if units are held for less than 12 months
• Investor does not pay any tax on dividends, but a Dividend Distribution Tax (DDT) is deducted at source @11.648% (10% + 12% surcharge + 4% Health & education cess)

The high growth companies in the investment portfolio have shown an annualized return of 12.11% year on year and have over 3.5 lakh unique investors as of 30 September 2019. Since the fund invests heavily in the equity market (90%+), the investment is heavily affected by market fluctuations and inherent market risks.

The ideal investment strategy will be to look at the investment as a long-term growth option linked to 5, 8 or 10+ years of duration to get handsome rewards. The fund is suitable for those looking for long term wealth creation options, retirement option or education corpus.

In the last 3-5 years, the scheme has given returns of 9.4% and 22.4%, respectively. This showcases that investors who have a 5+ year investment horizon can benefit greatly by investing in this mutual fund.

Investment can be made as both Regular and Direct plan variants with Growth or Dividend options. The Direct Plan has relatively lower expense ratio and will cover all administrative and maintenance costs, but with a higher NAV. The growth option reinvests the gains back into the fund, while the dividend options pay out the surplus gains to the investor. For long-term benefits, the growth plan is the best option.

The top 10 enterprises that this mutual fund has invested in as of 31/08/2019 are:

The top companies that the fund invests in are from the banking and financial sector, followed by the telecom and pharmaceutical sector. As the fund can invest only in a limited number of companies, the chosen companies have high growth potential in their particular sectors and are chosen after careful selection.

There are two methods to start investing in any mutual fund scheme. The requirements for those are as follows:

• Offline Investment Request: If you plan to raise the investment request offline, you will need basic KYC (Know Your Customer) documents like Aadhar Card, PAN Card, and other identification proof, a post-dated cheque with the bank you want to link your mutual fund scheme with and complete investment forms/bank mandate.

• Online Investment Request: If the request is raised online, the investor must complete online Aadhaar based KYC process. Once the online registration is complete, investors have to fill out the pre-filled bank mandate that will be sent to their registered email address. Once the KYC documentation and required documents are uploaded, the process is complete.

Investing in a mutual fund is easy and requires a few documents like:

1. Application form: You need multiple application forms to get a mutual fund. Firstly, to open a mutual fund account. The second form is required if you opt for a SIP plan within the fund. In case you are opting for an electronic transfer from your bank account, an ECS form will also be required. Some Asset Management Companies may ask for more forms such as a Risk Profile form to be submitted.

2. KYC Compliance: Under the Know Your Customer (KYC) norms of the Government of India, one needs an authorized PAN card to be able to invest in mutual funds. You can check your KYC compliance or register yourself. You can register at e-KYC Registration. If you are already KYC-compliant, you need to submit the KYC acknowledgement letter or copy of the KYC-compliance page.

3. KYC Documents: KYC individual form and Passport-sized photograph is needed.

4. Proof of identity: Any of the following documents are acceptable as proof of identity – PAN with a photograph, Aadhar Card, Passport, Voter’s ID card, Driving licence.

5. Proof of address: Any of the following documents can be submitted as proof of identity – Aadhar Card, Driving licence, Passport, Voter ID card, Ration card, Registered lease/sale agreement of residence, Flat maintenance bill, Insurance copy, Utility bills such as landline telephone bill, electricity bill or gas bill (less than 3 months old), Bank account statement/passbook (less than 3 months old)

6. Blank Cheque for SIP or lump sum investment: If the cheque doesn’t have the individual's name on it, then a bank statement for the ongoing month must also be submitted. Blank cheques are not mandatory any more, but may be required in case of SIP investment.