The new fund offer opens for subscription on April 25 and closes on May 09.
Franklin Templeton today announced the launch of its open end fund of funds called European Growth Fund. The feeder fund will pipe investments in its underlying fund Franklin European Growth Fund which invests in companies incorporated or having their principal business in European countries.
The fund is managed by Michael Clements, Claire Manson and Robert Franz Albert Mazzuoli who are a part of the eight member dedicated European team. The fund invests in a concentrated portfolio of 30 to 45 stocks. The fund invests in stocks which have competitive advantage, strong balance sheets and available at attractive valuations across all sectors and market capitalizations.
“Europe constitutes 24% of the world’s GDP and several European companies have demonstrated strong competitive advantage and global presence in sectors such as engineering, pharmaceuticals and consumer goods. With 34% of the world’s trade generated through Europe, this region remains one of the largest players and an excellent region to do business with. Adding an international fund with exposure to European companies to the portfolio can help investors reduce the potential portfolio risk over the medium to long term,” said Vivek Kudva, Managing Director, Franklin Templeton Investments.
According to Morningstar, the fund has delivered 11 % return since inception while fund’s benchmark has gone up by 7%.
Speaking about the fund’s investment strategy Michael Clements, Portfolio Manager, Franklin Templeton Investments said “With economic recovery gaining traction in Europe, corporate earnings are poised to show improvement. Like the U.S., many European companies have a global presence and will benefit from a synchronized recovery at home and abroad. While European equities have posted strong gains over the past year, valuations remain attractive in numerous pockets. Our bottom-up, long-term approach helps screen out unsustainable businesses and focus on high quality companies which demonstrate strong and sustainable competitive advantages, have solid balance sheets and are available at a reasonable price. We tend to be contrarian in our style, and our philosophy and process often lead us to segments of the market that are out of favour with other investors.”
The fund has exposure to 11 states in Europe, out of which the top three largest allocation is towards United Kingdom (34.13%), Netherlands (16.11 %) and France (9.94 %).
Recently, three fund houses – Deutsche, JP Morgan and Religare Invesco had also launched their Europe Funds.
Assets: € 2.8 billion
Minimum Investment: Rs. 5,000
Exit Load: 1% if redeemed within 18 months from allotment date
Benchmark: MSCI Europe Index. The MSCI Europe Index captures large and mid-cap representations across 15 Developed Markets (DM) countries in the Europe.
Expense ratio of the underlying fund: 0.97%
