Investors with a long-term horizon can hold on to their investment in Franklin India Opportunities, a multi-cap fund. The fund’s performance until 2013 was lacklustre when compared to its Benchmark S&P BSE 200 or other funds in the multi-cap category. But it has seen a marginal pick-up in its performance in the last two years. A change in the fund manager in March 2013 seems to have helped its case. The sustainability of the turnaround though,needs watching.
Why the underperformance
Unlike the other multi-cap funds from the same fund house such as Franklin Flexi Cap and Franklin High Growth, Franklin Opportunities failed to deliver robust returns for its investors in the 2009, 2010 and 2012 rallies. The fund has underperformed its benchmark too during these periods.
One of the key differentiators between these funds has been the proportion of large, mid and small-cap stocks in the portfolios.
Since 2009, Franklin India Opportunities has kept its large-cap holdings at more than 80 per cent at most times. Franklin Flexi Cap and High Growth have taken higher exposures to mid and small-caps (45 per cent to even 65 per cent) across these time periods, and have hence cashed in on the higher gains in this space during rallies.Click here to read more>>
