Fund Pick: Franklin India Flexi Cap Fund is a diversified outperformer

Franklin India Flexi Cap Fund, launched in September 1994, has consistently ranked in the top 30th percentile of the flexicap fund category of the CRISIL Mutual Fund Ranking (CMFR) for three consecutive quarters through October–December 2023.

The fund’s month-end assets under management increased to Rs 13,792 crore in December 2023 from Rs 9,033 crore in December 2020.

R Janakiraman, Sandeep Manam, and Rajasa Kakulavarapu have managed this fund since February 2011, October 2021, and December 2023, respectively.

The fund aims to provide capital growth to investors through a diversified portfolio of equities, fixed-income securities, and money market instruments.

Trailing returns

The fund has outperformed the benchmark (National Stock Exchange Nifty 500 TRI) in the past one-, two-, three-, five-, and 10-year trailing periods and its peers (funds ranked under the flexicap category in September 2023 CMFR) in the past one-, two-, three-, five-, seven-, and 10-year trailing periods.

To put this in perspective, Rs 10,000 invested in the fund at inception would have increased to Rs 13.38 lakh on January 24, 2024, at an annualised rate of 18.16 per cent. In contrast, the same investment in the category and benchmark would have grown to Rs 7.4 lakh (15.8 per cent) and Rs 1.78 lakh (10.33 per cent), respectively.

A systematic investment plan is a disciplined mode of investing offered by mutual funds through which one can invest a certain amount at regular intervals.

A monthly investment of Rs 10,000 for the past 10 years in the fund, totalling Rs 12 lakh, would have grown to Rs 28.55 lakh (or an annualised return of 16.58 per cent), compared with Rs 25.82 lakh (14.7 per cent) in the benchmark as of January 24, 2024.

Portfolio analysis

In the past three years, the fund has taken on higher exposure to largecap stocks and lower exposure to midcap and smallcap stocks.

Allocations to midcap and smallcap stocks averaged 12.47 per cent and 7.73 per cent, respectively, while those to largecap and non-equity portions averaged 74.91 per cent and 4.89 per cent, respectively.

The portfolio was diversified across 26 industries.

Financial services dominated, with an average allocation of 27.69 per cent, followed by information technology (11.26 per cent), consumer durables (9.73 per cent), construction (6.48 per cent), and automotive (6.16 per cent).

In the period under analysis, the fund took exposure to 86 stocks and held 25 consistently.

Key contributing stocks to the portfolio were Larsen & Toubro, ICICI Bank, Tata Motors, and Bharti Airtel.