Date:24/10/2004 URL: http://www.thehindubusinessline.com/bline/iw/2004/10/24/stories/2004102400250800.htm

Back Templeton India Growth Fund: Invest

Shanthi Venkataraman

INVESTORS with a long-term perspective can contemplate investments in Templeton India Growth Fund (TIGF).

Though its performance has trailed that of other diversified equity funds in the past year, the fund has, consistently outperformed the Sensex and Nifty on a one-year, three-year and five-year basis, making it one of the better picks among diversified equity funds. The performance during bear phases is particularly noteworthy, which makes it a good fund to hold as part of one's portfolio.

Suitability: Those who wish to diversify their portfolio can consider investing in the fund, which invests predominantly in large-cap stocks. The risks associated with the fund are, therefore, lower than for funds heavily invested in mid-cap stocks. The conservative investment strategy suits those who want to limit downside risk.

Performance: The fund has comfortably outperformed the Sensex and Nifty in the past year, delivering a return of 34 per cent. Its performance last year has not, however, been as impressive as funds such as HDFC Tax Saver, HDFC Tax Plan 2000 and HSBC Equity.

While most of the top-performing funds have piggybacked on the rally in the IT sector and in mid-cap stocks, the fund has maintained its large-cap focus and has stuck on to its holdings in the banking sector. This could explain its rather sedate performance.

The fund has managed to protect its net asset value from declines by a good measure during bearish phases. In 2000 and 2001, the fund outperformed the Sensex and Nifty as well as its peers, by a substantial margin.

Portfolio: Oil is the top holding. Auto, banking and steel are the other sectors in which the fund has significant holdings. The fund maintains a conservative investment strategy. Not more than 10 per cent of the assets are invested in any single stock.

The portfolio has added stocks belonging to the consumer goods sector. This limits the risk associated with having economically sensitive and cyclical stocks, such as banking, oil and chemicals, in the portfolio. The top three stocks of the fund are MICO, SBI and GAIL.

: The fund was launched in September 1996. It has an asset base of about Rs 415 crore. It offers dividend and growth options. The minimum application amount is Rs 5,000. The fund manager is Mark Mobius.