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Franklin launches high growth fund

BS Reporter  |  Mumbai 

on Tuesday launched aimed at tapping the fast growing stocks.
The open-ended fund will be picking up stocks from the National Stock Exchange's S&P CNX 500, though it would not be restricted only to this index.
The Fund will be investing 70 per cent in equities and the rest in debt and money-market instruments. Describing it as a 'plain vanilla diversified fund', KN Sivasubramanian, senior portfolio manager of the fund, said, "The economic and corporate fundamentals continue to be strong and India is projected to become one of the largest economies in the world. The fund's focus will be on companies offering the best trade-off between growth, risk and valuation."
He further said, "By growth we mean those companies with above average revenue growth, potential ROE, companies expanding sales as well as earnings at a much higher rate than general economies, companies with higher P/E multiples."
Giving examples of some high-growth domestic firms such as Infosys, Bharti and Kotak Mahindra Bank, he said, these companies have been outperformers and have given better return on equities compared to their counterparts in other parts of the world.
The fund will adopt a growth style of investing unlike other Franklin equity funds, which follow a blended style of investment, which means both growth and value-based companies.
It will be managed based on a mix of top-down (macro analysis to identify sectors) and bottoms-up approach (micro analysis to pick stocks within these sectors).
Vivek Kudwa, president, Franklin Templeton India, said, "Mutual fund penetration in India is still very small (4 per cent) compared with the US (54 per cent). However asset under management of MF companies has grown rapidly, driven by inflows into equities and fixed maturity plans."
The new fund offer period will be from May 31 to June 29, when units will be available at Rs 10. The minimum investment under the scheme is Rs 5,000.

First Published: Wed, May 30 2007. 00:00 IST