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Franklin India Smaller Companies Fund: Fund Review

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Franklin India Smaller Companies Fund invests predominantly in small-cap companies. It focuses on identifying high growth companies that are likely to transform into tomorrow’s market leaders resulting in capital appreciation over time. The fund gave 13.49% return since its launch in Jan 2006. The fund managers are R. Janakiraman, Srikesh Nair and Hari Shyamsunder.

 

 

Performance

Franklin India Smaller Companies Fund has managed to beat its benchmark and category most of the times since its inception. The funds trailing returns both 1 and 3-year are higher than its benchmark.

Franklin India Smaller Companies Fund has beaten its category average by 1-3 percentage points in the 2, 3 and 5-year returns. The fund’s returns are in line with that of its peers.

Fund1 Year Return (%)3 Year Return (%)5 Year Return (%)
Franklin India Smaller Companies Fund-10.62%13.13%21.24%
Reliance Small Cap Fund-10.73%18.74%26.13%
SBI Small Cap Fund-11.30%18.52%28.31%
DSP Small Cap Fund-14.86%11.83%23.22%
Axis Small Cap Fund-1.09%13.45%21.02%

A SIP investment of Rs 5,000 a month in Franklin India Smaller Companies Fund started 5 years ago is worth Rs 3.85 lakhs now. A profit of Rs 85,000 in just 5 years. The fund gave 13.49% return since its inception.

Fund Information

Franklin India Smaller Companies Fund seeks to provide long-term capital appreciation by investing predominantly in small-cap companies.  It focuses on identifying high growth companies that are likely to transform into tomorrow’s market leaders resulting in capital appreciation over time.

Fund has 94.28% investment in Indian stocks of which 15.55% is in large-cap stocks, 17.42% is in mid-cap stocks, 61.33% in small-cap stocks.

The fund has a well-diversified portfolio with 76 stocks in its portfolio. The top five holding sectors constitute 44.77% of the portfolio. These include Banks (13.33%), Industrial Products (8.71%), Construction (8.31%), Finance (7.80%), and Software (6.62%).

Recommendation

Invest in Franklin India Smaller Companies Fund with a long term view. This fund has higher ups and downs (volatility) than other equity funds but can yield much better returns. Invest in this fund for an investment horizon of at least 5 years to give the best results. It is ideal for long term goals like retirement, kids’ education, a seed fund for own startup. Don’t look at returns of these funds in the short-term.

Fund NameFranklin India Smaller Companies Fund
Launch DateJanuary 13, 2006
AUMRs 6,777 Cr
Return (Returns greater than 1 year are annualized)Since Launch: 13.49%
1 Year: -10.62%
3 Year: 13.13%
5 Year: 21.24%
Expense Ratio2.42%
Fund Category RiskHigh
Investment PlanGrowth
Minimum Investment Horizon5+ years
Minimum InvestmentRs 5,000
Minimum Additional InvestmentRs 1,000
Exit Load1% if withdrawn within 1 year
Fund ManagerR. Janakiraman
Srikesh Nair
Hari Shyamsunder
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