Franklin India Flexi Cap Fund*

Transcription

1 Franklin India Flexi Cap Fund* A flexible approach to allocate between Scale & Scope November 2017 *Please refer Slide 8 for Product Label 0

2 What do Multi-caps offer? Diversification across SECTORS Relatively lower volatility Diversification across STOCKS Multi-Caps offer Market Resilience Diversification across MARKET CAP Balanced Performance The characteristics mentioned are relative to large caps/mid caps. 1

3 Diversify your portfolio across SECTORS* Large Caps < 18 Multi Caps > Mid Caps Nifty 50 + Nifty Free Float Midcap 100 = Exposure to 16 Sectors (12 common & 4 different sectors in Nifty Free Float Midcap 100) But.. Nifty 500 = Exposure to 18 Sectors Source(latest available data): As on October 17. *For sector data and Large Caps, Multi-Caps and Midcaps are represented by Nifty 50, Nifty 500, and Nifty Free Float Midcap 100, respectively. 2

4 Diversify your portfolio across STOCKS < > Large Caps 501 Multi Caps Mid Caps Nifty 50 + Nifty Free Float Midcap 100 = 150 stocks However, Nifty 500 is the most diversified index with exposure across 501 stocks Source: NSE, as on October 17. Large Caps, Multi-Caps and Midcaps are represented by Nifty 50, Nifty 500, and Nifty Free Float Midcap 100, respectively. 3

5 Diversify your portfolio across MARKET CAP Market Cap range as on October 2017 Large Caps 40.3K cr 596K cr Market Cap in INR Thousand Crores (K Crs) Multi-Caps 0.24K cr 596K cr Market Cap in INR Thousand Crores (K Crs) Midcaps 4.3K cr 133K cr Market Cap in INR Thousand Crores (K Crs) Multi caps cover a very wide market cap range Source: Capitaline for Market Cap range. Data is as on October 17. Large Caps, Multi-Caps and Midcaps are represented by Nifty 50, Nifty 500, and Nifty Free Float Midcap 100, respectively. 4

6 Market resilience 120% 100% 80% 60% 40% 20% 0% 44% 60% 80% 36% 40% 34% 79% 71% 105% 10% 9% 4% 42% 32% 28% 37% 31% 26% -20% -40% -60% -80% -36% -48% Tech Crash & 9/11 Recovery post 9/11 India Re-rating -53% -58% -63% Global crisis lows Post-Crisis Peak -16% -19% -24% High inflation, slowing growth Nifty 50 Nifty 500 Nifty Free Float Midcap 100 Rebound in Post European US and QE3 Crisis buoying global rally -12% -19% -21% Chinese economic Slowdown Global Liquidity and Domestic Reforms Tech Crash and 9/11: 11 th Feb st Sep 01. Recovery Post 9/11: 21 st Sep th Jan 04. India Re-rating: 14 th Jan 04-8 th Jan 08. Global Crisis Lows: 8 th Jan 08-9 th Mar 09. Post Crisis Peak: 9 th Mar 09 9 th Nov 10. High inflation, slowing growth: 9 th Nov th Jan 12 Rebound in US and QE3 buoying global rally: 30 th Jan th Jun 13 Post European Crisis: 28 th Jun th Feb 15 Chinese economic Slowdown: 27 th Feb th Feb 16 Global Liquidity and Domestic Reforms: 29 th Feb st Oct 17 Historically Multi caps have displayed resilient performance across market cycles Past Performance may or may not be sustained in future. Source: NSE. Returns are compounded and annualised for period over 1 year and are as on end of October 17. Midcap, Large Cap and Multi Cap are represented by Nifty Free Float Midcap 100, Nifty 50 and Nifty 500. The above graph depicts performance of various indices in the specified time periods which have displayed significant market movement due to change in domestic/global macroeconomic variables. 5

7 In percentage Volatility* year volatility Large Cap Multi - cap Midcap 5-year volatility Historically Multi caps have generally been less volatile than Midcaps Past Performance may or may not be sustained in future. Source: NSE. Data is taken as on October 31, Large Caps, Multi-Caps and Midcaps are represented by Nifty 50, Nifty 500, and Nifty Free Float Midcap 100 respectively. * Volatility is based on standard deviation. Standard deviation is calculated on rolling returns which are taken in monthly steps for the period Jan 2001 till Oct 2017 for both 3 and 5 year period. 6

8 Performance varies from year to year Calendar year returns for Large Caps, Multi Caps and Mid Caps (%) Index CY 02 CY 03 CY 04 CY 05 CY 06 CY 07 CY 08 CY 09 CY 10 CY 11 CY 12 CY 13 CY 14 CY 15 CY 16 Large Caps Multi-Caps Midcaps Best Performance among the given set The best performing market cap keeps rotating A flexible allocation can help in benefitting from rotating opportunities Past Performance may or may not be sustained in future. Source: NSE. Absolute returns are shown here. Large Caps, Multi-Caps and Midcaps are represented by Nifty 50, Nifty 500 and Nifty Free Float Midcap 100, respectively. 7

9 Presenting Franklin India Flexi Cap Fund Product Label This product is suitable for investors who are seeking* Long term capital appreciation A fund that invests in stocks of companies across the market cap range *Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 8

10 About the fund Blend of Growth and Value Invests across market cap Franklin India Flexi Cap Fund Benefits from Stock selection Rolling Returns Resilient over market cycles 9

11 Fund type Franklin India Flexi Cap Fund Blend of Growth and Value Invests across market cap Benefits from Stock selection Rolling Returns Resilient over market cycles 10

12 True to the label Franklin India Flexi Cap Fund Blend of Growth and Value Invests across market cap Benefits from Stock selection 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Franklin India Flexi Cap Fund(FIFCF)- (Allocation to Large Cap, Mid Cap & Small Cap) Rolling Returns Resilient over market cycles 0% Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Apr Oct Large Cap Mid Cap Small Cap As per the allocation since Oct 2007 on a monthly basis Large Cap range: 46% - 81% Mid Cap range : 14% - 45% Small Cap range : 1% - 13% Allocation varies across market cap depending on markets and fund manager view Source: Internal calculations for large, mid and small cap classification. Data is as on October 31, Information is historical and may not reflect current or future portfolio characteristics. Portfolio holdings are subject to change. The graph shows large cap, mid cap and small cap break as a % of the total equity. 11

13 Stock Selection is the key Franklin India Flexi Cap Fund Blend of Growth and Value Invests across market cap Benefits from Stock selection Rolling Returns Resilient over market cycles Past performance may or may not be sustained in future Source: Factset. 5 Years (ending October 31, 17) Attribution Analysis Allocation Effect Selection Effect Interaction Effect Franklin India Flexi Cap Fund Stock selection clearly the key contributor to performance Stock picking ability has ensured performance holds up well over the medium to long term, irrespective of how allocation decisions fared Allocation Effect: It measures the impact of decisions to overweight (OW) or underweight (UW) a particular sector relative to the benchmark. Positive allocation effect: Fund is (a) OW in a sector that outperforms (OP), and/or (b) UW in a sector that underperforms (UP), total returns of the benchmark. Negative allocation effect: Fund is (a) OW in a sector that UP, and/or (b) UW in a sector that OP, total returns of the benchmark. Selection Effect: It measures the impact of selecting securities that provide different returns for a particular sector, compared to the total benchmark returns. It evaluates the fund manager's skill in choosing securities that outperformed in a particular sector, compared to the benchmark. Interaction Effect: It measures the combined impact of allocation and selection effects. Positive interaction effect: Fund is (a) OW and OP, and/or (b) UW and UP, compared to the weights and returns of a particular sector in the benchmark. Negative interaction effect: Fund is (a) OW and UP, and/or (b) UW and OP, compared to the weights and returns of a particular sector in the benchmark. All attribution effects are computed daily and are linked through time by applying additional multi-period algorithms. 12

14 Contributors/detractors in last 3 years Sector Average Weight (%) FIFCF Nifty 500 Total Return (%) Average Weight (%) Total Return (%) Allocation Effect Selection Effect Interaction Effect Contributors Health Care Energy Information Technology Materials Utilities Financials Industrials Detractors Telecommunication Services Consumer Staples Consumer Discretionary Past performance may or may not be sustained in future. Source: Factset as on October 31, Information is historical and may not reflect current or future portfolio characteristics. Portfolio holdings are subject to change. Indicates high contribution to the total effect. 13

15 Scheme Performance As on October 31, 2017 Scheme NAV as on Oct 31, 2017 Compounded Annualised Growth Rate Performance (%) Since inception Value of Investment of Last 1 year (Oct 28, Last 3 Years (Oct 31, Last 5 Years (Oct 31, Inception Date till Oct 31, 2017 Rs.10,000 since inception 2016 to Oct 31, 2017) 2014 to Oct 31, 2017) 2012 to Oct 31, 2017) NAV* Returns NAV* Returns NAV* Returns NAV* Returns Franklin India Flexi Cap Fund (FIFCF) - Growth % % % % 78, B:Nifty % % % % 50,148 AB:Nifty % % % % 49,374 Performance of Top 3 and bottom 3 schemes managed by the fund managers of the scheme Franklin India Taxshield (FIT)-Growth % % % % 543, B:Nifty % % % % 131,845 AB:Nifty % % % % 104,040 Franklin India Prima Fund (FIPF)-Growth % % % % 948, B:Nifty % % % % 108,449 B: Nifty Free Float Midcap % % % - N.A^^^ N.A^^^ AB:Nifty % % % % 102,537 Franklin India Prima Plus (FIPP) - Growth % % % % 574, B:Nifty % % % % 84,116 AB:Nifty % % % % 78,809 Franklin India Pension Plan (FIPEP) - Growth % % % % 120, Benchmark$ % % % - N.A^^^ N.A^^^ AB: Crisil 10 Year Gilt Index % % % - N.A^^^ N.A^^^ Franklin India Opportunities Fund (FIOF) - Growth % % % % 73, B:S&P BSE 200# % % % % 13,439 AB:Nifty % % % % 58,941 Franklin India Monthly Income Plan (FIMIP) - Growth % % % % 52, B: Crisil MIP Blended Fund Index % % % - N.A^^^ N.A^^^ AB: Crisil 10 Year Gilt Index % % % - N.A^^^ N.A^^^ Past performance may or may not be sustained in future. Fund Managers: FIFCF: Lakshmikanth Reddy (Managing Since 02-May-16) & R. Janakiraman (Managing Since 21-Feb-14), FIT: Lakshmikanth Reddy (Managing Since 02-May-16) & R. Janakiraman (Managing Since 02-May-16), FIPP: Anand Radhakrishnan (Managing Since 31-Mar-07) & R. Janakiraman (Managing Since 01-Feb-11), FIPF: R. Janakiraman (Managing Since 11-Feb-08) & Hari Shyamsunder (Managing Since 02-May-16), FIOF: R. Janakiraman (Managing Since 01-Apr-13) & Hari Shyamsunder (Managing Since 02-May-16), FIPEP: Equity-Lakshmikanth Reddy (Managing Since 02-May-16); Debt-Sachin Padwal-Desai (Managing Since 30- Nov-06), Umesh Sharma (Managing Since 05-Jul-10), FIMIP: Equity-Lakshmikanth Reddy (Managing Since 02-May-16); Debt-Sachin Padwal-Desai (Managing Since 05-Jul-10), Umesh Sharma (Managing Since 05-Jul-10). B: Benchmark. AB: Additional Benchmark. N.A.: Not Applicable. *NAV (beginning of period). The FIFCF fund manager Lakshmikanth Reddy & R. Janakiraman manages 5 & 6 schemes of Franklin Templeton Mutual Fund respectively. Period for which scheme s performance has been provided is computed basis last day of the month-end preceding the date of advertisement. The top three and bottom three funds managed by the fund manager(s) have been derived on the basis of the since inception returns. Different plans have a different expense structure. The performance details provided herein are of Regular Plan. $Benchmark: 40% Nifty % CRISIL Composite Bond Fund Index. Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. On account of difference in the type/category, asset allocation or investment strategy, inception dates, performances of these funds are not strictly comparable. Please refer to for details on performance of all schemes (including Direct Plans). # Index adjusted for the period February 21, 2000 to March 10, 2004 with the performance of ET Mindex. ^^^ As the scheme 14 was launched before the launch of the benchmark index, benchmark index figures since inception are not available..

16 Mar-05 Jun-06 Sep-07 Dec-08 Mar-10 Jun-11 Oct-12 Jan-14 Apr-15 Jul-16 Oct-17 Rupees Over 12 years of wealth creation Movement of Rs. 10,000 invested in FIFCF Growth option, Nifty 500, & Nifty FIFCF: Rs. 78, B: Nifty 500: Rs. 50,148 AB: Nifty 50: Rs. 49, FIFCF B: Nifty 500 AB: Nifty 50 Past performance may or may not be sustained in future. The graph shows the movement of Rs. 10,000 invested in FIFCF Growth Option, Nifty 500 and Nifty 50 since inception of the fund. B: Benchmark, AB: Additional Benchmark. Inception Date: March 2, Period: March 2, 2005 to October 31, Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken into consideration. 15

17 Absolute Returns (%) Calendar Year Returns (20) (40) (60) (80) 2017 YTD FIFCF (22) (52) B: Nifty (1) (27) (57) AB: Nifty (4) (25) (52) Outperformance over B (6) (0) (13) 8 Outperformance over AB (1) (6) 2 Past performance may or may not be sustained in future. The chart shows the calendar year returns for FIFCF Growth Option, Nifty 500 and Nifty 50. B: Benchmark, AB: Additional Benchmark. Inception Date: March 2, YTD is as on October 31, Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken into consideration. The superlative returns in 2009 and 2014 were on account of overall sharp rise in stock prices coupled with stock selection and overweight position in outperforming sectors. 16

18 The advantage of long term investing Franklin India Flexi Cap Fund Growth Option 50.0% Historical instances of +ve performance Historical instances of ve performance 40.0% 37.9% 30.0% 20.0% 10.0% 0.0% 91.2% 94.3% 8.8% 5.7% 100% 26.2% 25.0% 0% 2.2% 100% 21.2% 14.7% 14.5% 13.9% 14.6% 7.5% 10.3% 0% 100% 0% -10.0% -20.0% -10.4% 3 Year 5 Year 7 Year 10 Year Maximum Returns Minimum Returns Average Returns Past performance may or may not be sustained in future. Period to Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. Returns greater than 1 year period are compounded annualized. Note: The above graph shows the performance on a daily rolling return basis to compute returns for respective periods (3, 5, 7 and 10 years). Please turn overleaf for performance data of Benchmark and Additional Benchmark 17

19 The advantage of long term investing Nifty 500* Nifty 50** 40.0% 36.1% 50.0% 30.0% 40.0% 39.7% 20.0% 10.0% 88.3% 20.9% 96.7% 19.5% 100% 11.7% 3.3% 0% 10.1% 10.0% 9.4% 2.7% 100% 15.4% 0% 6.6% 10.3% 30.0% 20.0% 94.1% 97.9% 100% 100% 5.9% 2.1% 0% 0% 22.6% 18.4% 16.2% 10.1% 10.1% 9.6% 10.2% 0.0% 10.0% 3.7% 5.8% -10.0% -20.0% -2.6% -10.3% 3 Year 5 Year 7 Year 10 Year 0.0% -10.0% -1.2% -6.4% 3 Year 5 Year 7 Year 10 Year Maximum Returns Minimum Returns Average Returns Maximum Returns Minimum Returns Average Returns Historical instances of +ve performance Historical instances of ve performance Past performance may or may not be sustained in future. Period to Load is not taken into consideration. Dividends assumed to be reinvested and Bonus is adjusted. Returns greater than 1 year period are compounded annualized. *Benchmark. **Additional Benchmark Note: The above graph shows the performance on a daily rolling return basis to compute returns for respective periods (3, 5, 7 and 10 years) 18

20 Returns (%) Market resilience (as of October 31, 2017) (20) (40) (60) (80) P1 P2 P3 P4 P5 P6 P7 P8 P9 FIFCF-Growth 50 (55) 91 (16) 8 47 (13) B: Nifty (58) 79 (19) 9 32 (19) AB: Nifty (53) 71 (16) (21) Outperformance over B (1) 14 6 (6) 4 Outperformance over AB 30 (1) 20 (0) (2) 19 8 (1) 4 P1: India Re-rating: 2 nd Mar 05-8 th Jan 08. P2: Global Crisis Lows: 8 th Jan 08-9 th Mar 09. P3: Post Crisis Peak: 9 th Mar 09 9 th Nov 10. P4: High inflation, slow growth: 9 th Nov th Jan 12 P5: Rebound in US and QE3 buoying global rally: 30 th Jan th Jun 13 P6: Post European Crisis: 28 th Jun th Feb 15 P7: Chinese economic Slowdown: 27 th Feb th Feb 16 P8: Global Liquidity and Domestic Reforms: 29 th Feb st Oct 17 P9: Since Inception till 31 st Oct 17 Past performance may or may not be sustained in future. FIFCF- Growth option is taken for calculations. Returns are compounded and annualized for more than 1 year period. Inception Date: March 2, Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken into consideration. B: Benchmark, AB: Additional Benchmark. The above graph depicts performance of the fund vis-à-vis benchmark and additional benchmark in the specified time periods which have displayed significant market movement due to change in domestic/global macroeconomic variables. 19

21 SIP Returns as on October 31, 2017 If you had invested Rs every month in FIFCF- Growth FIFCF 1 year 3 year 5 year 7 year 10 year Since Inception Total amount Invested (Rs) 120, , , ,000 1,200,000 1,520,000 Total value as on Oct 31, 2017 (Rs) 134, , ,918 1,548,019 2,809,054 4,409,195 Returns 23.46% 13.64% 18.13% 17.15% 16.22% 15.65% Total value of B: Nifty , , ,329 1,416,737 2,352,777 3,471,849 B:Nifty 500 Returns 28.92% 16.39% 16.42% 14.67% 12.91% 12.27% Total value of AB: Nifty , , ,597 1,293,210 2,143,477 3,222,959 AB: Nifty 50 Returns 24.80% 13.01% 13.01% 12.11% 11.17% 11.20% Past performance may or may not be sustained in future. B: Benchmark, AB: Additional Benchmark. Inception Date: March 2, Returns over 1 year period are compounded annualized. Calculations assume investment on the 1st business day of every month. Load is not taken in to consideration. Dividends are assumed to be reinvested and bonus is adjusted. On account of difference in the type/category, asset allocation or investment strategy, inception dates, performances of the fund is not strictly comparable. 20

22 Consumer Discretionary Utilities Telecommunication Services Health Care Financials Real Estate Information Technology Consumer Staples Energy Materials Industrials Underweight In (%) Overweight Fund Facts: Overweights/Underweights as on October 31, Source: Factset as on October 31, Calculations are done for the portfolio vis a vis its benchmark index Nifty 500 for determining overweights and underweights. Information is historical and may not reflect current or future portfolio characteristics. 21

23 Dividend History Year Record date Dividend Per Unit(Rs.) (A) Record date Nav(Rs.) - Dividend Option (B) Record date Nav(Rs.) - Direct Dividend Option Dividend Yield* (A/B) 2017 March % 2016 March % 2015 March % 2014 March % 2013 March % 2012 March N.A 14% 2011 March N.A 10% 2010 March N.A 12% 2009 July N.A 10% 2008 March N.A 17% 2007 May N.A 13% 2006 March N.A 11% Dividends on face value of Rs.10/- Past performance may or may not be sustained in future. Pursuant to payment of dividend, the NAVs of the schemes would fall to the extent of payout and statutory levies (as applicable). *Dividend yield is mentioned for Dividend option. 22

24 23 Portfolio Composition Top 10 holdings Sector Share of equity AUM HDFC Bank Ltd Banks 10.15% Axis Bank Ltd Banks 6.75% Mahindra & Mahindra Ltd Auto 5.26% Hindustan Unilever Ltd Consumer Non Durables 3.57% State Bank Of India Banks 3.41% NTPC Ltd Power 3.25% Bharti Airtel Ltd Telecom - Services 3.16% Petronet Lng Ltd Gas 2.86% Tata Motors Ltd, DVR Auto 2.81% Indian Oil Corp Ltd Petroleum Products 2.56% Total (Top 10 ) 43.77% Total Equity 93.41% Top Sector Allocation Share of equity AUM Banks 25.97% Auto 11.08% Consumer Non Durables 8.54% Software 6.93% Power 5.52% Pharmaceuticals 5.26% Gas 4.80% Finance 4.44% Telecom - Services 4.03% Petroleum Products 3.57% Total 80.14% These securities represent the ten largest holdings held in the Fund as of the date indicated. All portfolio holdings are subject to change. The information stated above does not constitute an investment advice or recommendation to subscribe or transact in these securities. Sector classification based on AMFI. As of October 31, 2017

25 Why invest in FIFCF 1 Provides an opportunity to capture growth potential across big and small companies in a comprehensive manner 2 Benefit from Blend Investment style (combination of Growth and Value) 3 Flexibility to buy into companies across market caps 4 Long term (performance+ dividend) track record of over 12 years 24

26 25 Fund Characteristics as on October 31, 2017 Fund Description Open-end fund with the flexibility to buy into companies across market caps Inception Date March 2, 2005 Assets Rs. 2, crore (October 31, 2017) Managed by Investment Style Lakshmikanth Reddy & R. Janakiraman. Srikersh Nair (dedicated fund manager for foreign securities) Blend of growth and value Minimum Amount Benchmark Nifty 500 Subscription: Fresh Purchase - Rs.5,000/-. Additional Purchase - Rs.1,000/-. Redemption: Rs.1,000/-. The amount for subscription and redemption in excess of the minimum amount specified above is any amount in multiple of Re. 1/-. Volatility Measures (3 years) (October 31, 2017) Portfolio Turnover (October 31, 2017) Exit Load Standard deviation: 3.42% Beta: 0.81 Sharpe Ratio*: % 1% if the units are redeemed/switched-out within one year of allotment *Annualised. Risk free rate assumed to be 6.00% (FBIL overnight MIBOR) 25

27 Reward Risk Reward Matrix for select FT Equity Funds 26 Thematic Franklin Build India Fund Franklin India Smaller Companies Fund Franklin India Prima Fund Diversified Equity Franklin India High Growth Companies Fund Franklin India Taxshield Hybrid Income Franklin India Prima Plus Fund Franklin India Bluechip Fund Franklin India Flexi Cap Fund Liquid Risk 26

28 Risk Factors The information contained in this presentation is not a complete representation of every material fact regarding any industry, security or the fund. This communication is meant for use by the recipient and not for circulation/reproduction without prior approval. The views expressed by the portfolio managers are based on current market conditions and information available to them. Statements / opinions / recommendations in this document, which contain words, or phrases such as will, expect, should, believe and similar expressions or variations of such expressions, are forward looking statements. Actual results may differ materially from those suggested by the forward looking statements due to risk or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and / or investments. Scheme Classification and Objective: Franklin India Flexi Cap Fund (FIFCF): An open-end diversified equity fund that seeks to provide medium to long term capital appreciation by investing in stocks across the market capitalisation range. Please refer to website for latest load structure of the scheme. Risk Factors: The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. The past performance of the mutual funds managed by the Franklin Templeton Group and its affiliates is not necessarily indicative of future performance of the schemes. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 27

29 Franklin Templeton Asset Management (India) Pvt. Ltd. Indiabulls Finance Centre, Tower 2, 12 th and 13 th floor, Senapati Bapat Marg, Elphinstone (W) Mumbai Tel (91-22) Fax (91-22) Franklin Templeton Investments. All rights reserved. 28