February Franklin Templeton Investments Monthly Fact Sheet

Transcription

1 February 2015 Monthly Fact Sheet

2 Contents Market Update EQUITY Franklin India Bluechip Fund (FIBCF) Templeton India Growth Fund (TIGF) Franklin India Prima Plus (FIPP) Franklin India Prima Fund (FIPF) Franklin India Flexi Cap Fund (FIFCF) Franklin India High Growth Companies Fund (FIHGCF) Franklin Asian Equity Fund (FAEF) Franklin India Opportunities Fund (FIOF) Franklin Build India Fund (FBIF) Templeton India Equity Income Fund (TIEIF) Franklin India Taxshield (FIT) Franklin India Smaller Companies Fund (FISCF) Franklin India Index Fund - NSE Nifty Plan (FIIF) Franklin Infotech Fund (FIF) Franklin India Feeder - Franklin U.S. Opportunities Fund (FIF-FUSOF) Franklin India Feeder - Franklin European Growth Fund (FIF-FEGF) HYBRID Franklin India Dynamic PE Ratio Fund of Funds (FIDPEF) Franklin India Multi Asset Solution Fund (FIMAS) Franklin India Life Stage Fund of Funds (FILSF) Franklin India Balanced Fund (FIBF) Franklin India Pension Plan (FIPEP) INCOME & LIQUID Franklin India Monthly Income Plan (FIMIP) Franklin India Corporate Bond Opportunities Fund (FICBOF) Franklin India Income Opportunities Fund (FIIOF) Franklin India Dynamic Accrual Fund (FIDA) (Fund name change w.e.f. 01 December 2014, Erstwhile Franklin India Income Fund ) Franklin India Treasury Management Account (FITMA) Franklin India Income Builder Account (FIIBA) Franklin India Ultra Short Bond Fund (FIUBF) Franklin India Government Securities Fund (FIGSF) Franklin India Banking & PSU Debt Fund (FIBPDF) Franklin India Short Term Income Plan (FISTIP) Franklin India Savings Plus Fund (FISPF) Franklin India Low Duration Fund (FILDF) Annexure Scheme Performance SIP Returns Dividend/Bonus History/Fund Managers Industry Experience

3 Equity Market Snap Shot Anand Radhakrishnan, CIO Franklin Equity Global Global equity markets posted strong gains in February. Initially, there was uncertainty surrounding Greece's debt dilemma, however, Greece's bailout extension deal with Eurozone and receding geo-political tensions (especially in Ukraine) toward the later part of month, boosted equity markets across the globe. Meanwhile, in Federal Reserve's semiannual Monetary Policy Report, Fed Chairman's statement that committee considers it unlikely that economic conditions will warrant an increase in the target range for the federal funds rate for at least the next couple of FOMC meetings indicated that rate hike was some time away. The developed equity markets outperformed their emerging market peers, wherein MSCI AC World index and MSCI EM index returned 5.40% and 2.98% respectively. Russian and Brazilian markets were the best performers in February primarily on account of rise in the crude oil prices. Even French markets were among the top performers mainly due to Greece's bailout extension plan. In the commodity space, crude oil prices posted their first monthly gain since June, on account of improving demand outlook coupled with news regarding supply outages and cut back in capital spends by major crude oil companies. On the other hand, with overall US economic data indicating towards a better economic environment and strengthening of dollar, gold prices weakened. Monthly Change (%) Monthly Change (%) OUTLOOK The government seems to be focused on improving the infrastructure sector and has laid out various measures which include a significant outlay on roads and railways, higher public investment in the sector and tax free infrastructure bonds in order to boost the sector. It has also announced a National Investment and Infrastructure Fund (NIIF), to be established with an annual flow of Rs. 20K crores to it. We believe these measures if implemented could have a ripple effect across other allied sectors. The government has also recognized the importance of states in executing projects and has budgeted for a higher transfer of receipts to states in the coming fiscal year. This could help in addressing region specific requirements. We believe that execution of the measures introduced (in budget) along with revival of the investment cycle, could be closely tracked by the market participants. There have been some earnings downgrades recently; however, sectors that are leveraged to resurgence in domestic investment and capex could see some recovery in the coming fiscal (FY16). There seems to be a significant emphasis on providing stimulus to 'Make in India' vision (as per budget document) as indicated by tweak in taxes, laying down measures which could address ease of doing business and encouraging domestic and foreign direct investment. We believe that reduction in corporate tax could improve corporate profitability in the long term period. This along with anticipated pick up in GDP growth could translate into better corporate earnings growth. Corporate earnings which are likely to be low for the current year (FY15) could start improving from 1QFY16. Even though the benchmark indices are close to the all-time highs, the valuations are slightly above the long term average. Hence, market returns going forward are likely to be a function of corporate earnings growth. With converging valuation gap between midcap and large cap stocks, investor could consider diversified equity funds for disciplined investments. MSCI AC World Index FTSE Eurotop 100 MSCI AC Asia Pacific Dow Jones Nasdaq Xetra DAX CAC 40 FTSE 100 Hang Seng Nikkei S&P BSE Sensex CNX Nifty CNX 500 Monthly Change (%) S&P KOSPI 1.87 CNX Midcap INDIA S&P BSE Smallcap Indian equity markets which began the month on weak note due to frail corporate earnings growth started inching up in anticipation of significant reforms in the upcoming union budget and finally closed the month in green, with marginal gains. Improvement in macro-economic variables which included encouraging GDP number (the FY15 advance estimate ahead of expectations), an uptick in IIP, substantial drop in trade deficit, supportive figures for CPI & WPI inflation and robust foreign inflows supported the uptrend. Technology, capital goods and metals were the best performing sectors in February. Acquisition by a major player and better than expected quarterly earnings posted by one of the key players (highlighting strength in the demand environment), augured well for technology sector. Beginning of coal block auctions bode well for certain companies in the metal sector. Meanwhile, oil & gas, FMCG and banking sectors were among bottom performers. While weak quarterly results (due to subsidy burden) reported by some of the key players weighed on oil & gas sector, concerns on asset quality of most of the PSU banks affected the banking sector performance. FMCG sector began the month on high note and gained in the run up to budget, closed in red post hike in the excise duty for cigarettes. Mid and small cap equity indices lagged their large cap peers during the month. FIIs flows into Indian equities continued to be healthy and aggregated to a net $1.4 bn, in February. Macro: The macro economic data points improved during the month wherein trade deficit declined significantly, IIP continued to rise and inflation continued to remain range bound. Further, with the CSO revising the base year for GDP and announcing changes in the methodology and presentation, the FY15 advance estimate pegged growth at 7.4% vs 6.9% in FY14. India's trade deficit continued to decline touching an 11 month low and stood at $8.32 bn in January. Though exports contracted 11.19%YoY and stood at $23.88bn, imports reflected a sharper decline of 11.39%YoY (mainly due to weakness in crude oil prices, which helped in bringing down country's import bill) and stood at $32.20 bn. However, in absolute terms the trade deficit for Apr '14 Jan'15 (estimated at $ bn) is higher than the same period last year (at $ bn). India's IIP continued to rise and recorded a growth of 1.7%YoY in December. The rise in IIP was mainly driven by manufacturing which grew at 2.1% (manufacturing has the 75% weightage in IIP). Electricity also recorded modest growth, however, mining contracted by 3.2%. The cumulative growth for Apr-Dec 2014 came in at 2.1% as against flat growth in the same period last year. The much awaited first full budget from the new government was presented on the last day of month. It extended the fiscal consolidation roadmap to 3 years from 2 years but this came with an effort to raise investment spend. Other incentives included staggered rate cut for corporates, merging of FDI/FII ownership limit and some minor tax breaks for individual investors. Further, clarity was given on GST and GAAR and there was significant emphasis on the socio-economic programs. Templeton Equity View : Budget for the Future Chetan Sehgal, CIO - India, Emerging Markets The backdrop to the Budget has been the improving macro-economic situation for India at a time when many economies are in turmoil. The change in the base year of measuring national accounts showed that India's economy had fared much better than previously thought and it likely that India would exceed previous estimates of growth in FY16. Though many would argue on the statistical validity, the fact remains that the enormous productivity gains remain under appreciated in many developing economies as commerce and trade are facilitated with greater integration and the rise of e-commerce. India has been one of the principal beneficiaries of low crude oil and energy prices. In addition the government's resolve to curtail subsidies as well as focus them on the needy means that the government finally has some fiscal room. However, the true room for fiscal maneuverability is not that significant, especially in the near term, as what the market had initially perceived. This is particularly so, given that a large part of the fiscal deficit was bridged by raising capital through divestments and much of those proceeds went towards bridging the revenue deficit. In addition, the government faces additional liabilities as many government run banks would need more capital in order for them to sustain themselves in a Basel 3 regimen. On the foreign exchange and trade side, the Reserve Bank on its part aimed to unwind some of the relaxations which it had introduced to encourage fund flows, such as limits on Government of India borrowings which have since been curtailed. It has also lifted some of the curbs on imports as well as on external remittances - thus presenting a true picture of the balances in the economy, in absence of full capital account convertibility. The subsequent interest rate cut implies the RBI finds many macro-economic indicators to be particularly stable, and has factored in the quality of fiscal deficit in making its decision. The successful auction of coal mines has been one of the prime achievements by the government. In addition the government has initiated processes for auctioning telecom spectrum. We have no doubt that such auction models would eventually lead to better deployment of natural resources and many more such auctions can be expected. In addition the central government's decision to accept greater devolution of funds to the states, on an unconditional basis implies a greater role for state governments in setting the growth agenda and achieving growth targets. Many state governments would see their deficits reduce, as a result of these actions and as investors the decline in the "consolidated fiscal deficit" would be a very welcome sign. Governments all over the world should look at these examples of successful auctions, and the reduction in crony capitalism would help to enhance growth rates. The goal of the government is to simplify procedures and clarify rules. That itself would go a long way in ushering in investments. The targeting of black money through account declaration could have also been done by simply passing a rule that any overseas account with an ultimate Indian beneficiary should have the PAN number mentioned and reported to Indian government. It may be easier to have large financial institutions comply and may reduce the possibility of very cumbersome procedures, which in turn could end up impacting a large foreign returned Indian workforce, something the government may not intend. 3

4 Fixed Income Market Snap Shot Santosh Kamath, CIO - Fixed Income Globally, bond yields rose in the month of February, but subsided a bit towards the end of the month. US treasury yields rose sharply in the first half of the month on the back of rising expectations of an interest rate hike by the Fed, some strong economic and jobs data, and also some recovery in crude oil prices. However, later in the month, US treasury yields eased a bit after the Fed's January meeting minutes and recent comments from Fed Chair Janet Yellen continued to signal patience in raising rates. The benchmark 10 year US treasury yield finally closed the month up 33 bps. In Asia, the People's Bank of China expanded stimulus measures by cutting banks' reserve requirement ratio (RRR) by 50 bps effective from February 5, and followed it up with a 25 bps benchmark interest rate cut at the end of the month. In the currencies space, the dollar index rose marginally by 0.5% in February, after its stellar performance in the previous month. In India, bond yields (especially at the long end of the curve) remained more or less stable during the month, ahead of the Union Budget, which was announced on February 28, The budget outlined some changes to the medium term fiscal deficit roadmap. Although the government remained committed to achieve 3% fiscal deficit target, it pointed that that the same would be achieved in 3 years rather than 2 years as outlined earlier. Therefore the revised fiscal deficit targets are 3.9 GDP for FY16 (from 3.6% earlier), 3.5% for FY17 (from 3% earlier), and 3% for FY18. However, on a positive note, the government said that it will be able to meet its budgeted estimate of fiscal deficit of 4.1% in FY15, which it had highlighted as a "daunting task" last year. The market borrowing announced by the government was lower than anticipated, which provided some respite to the bond markets. Net market borrowing for FY16 was budgeted at Rs trillion (up only 2.1% YoY), and gross market borrowing remained largely unchanged at Rs. 6.0 trillion. The budget also announced a higher devolvement to states, as per recommendations of 14th Finance Commission. Foreign portfolio inflows into the debt markets continued to be healthy, and came in at a net $ 2.2 bn in the month of February. Domestic Market Scenario Yields: Bond yields rose at the shorter end of the curve, but closed on a stable note at the longer end of the curve during the month. The 1-year gilt yield closed the month up 28 bps. At the longer end, the 10 year gilt yield closed down 1 bp, while the 30-year gilt yield closed down 4 bps. The 5-year AAA corporate bond yield also closed the month on a flat note up 2 bps. Forex: The rupee remained more or less stable during the month, and finally closed the month on a flat note against the US dollar. Continuing healthy foreign portfolio inflows helped to support the rupee. Liquidity: Liquidity conditions remained comfortable during the month. The overnight call money rate finally closed the month at 7.30%, compared to last month's close of 7.95%. During the month of February, there was an average daily net injection of Rs bn by the RBI as part of its liquidity operations, compared to an average daily net injection of Rs bn in the previous month. Macro: Consumer price index (CPI) headline inflation rose marginally to 5.1%YoY in January 2015 (based on new series with new base year of 2012), compared to December 2014 CPI inflation of 5.0%YoY based on old series (with base year of 2010). On sequential terms, the index was flat at 0%MoM in January On an even more favourable note, January 2015 core CPI inflation in the new series came in at 3.9%YoY, significantly lower than the December 2014 core CPI inflation of 5.3% in the old series. Meanwhile, Wholesale price index (WPI) inflation also surprised positively and came in at -0.4%YoY in January 2015, compared to 0.1%YoY in the previous month. The RBI also signed a monetary policy framework with the government, where the key points are as follows: RBI will aim to bring down CPI inflation to 6% by Jan CPI inflation target for FY17 and subsequent years will be 4% (+/- 2%). RBI would be seen to have failed to meet the target if CPI inflation is >6% for 3 consecutive quarters in FY16 & subsequent years, or less than 2% for 3 consecutive quarters in FY17 & subsequent years. In its policy statement, the RBI said that softer reading in inflation is expected in 1H FY16, before firming up to below 6% in the second half. The central bank also clarified that it seeks to bring inflation to the mid-point of the band (i.e. 4%) by the end of FY18. Further monetary action would depend on data, fiscal consolidation, pass-through of rate cuts, monsoon & global developments. OUTLOOK Overall, the budget was a balanced one for the fixed income markets. The budgeted market borrowing was lower than anticipated, and may help the private sector to participate more in raising credit. Also, the flexibility in the fiscal deficit roadmap will provide space to fund infrastructure investment, which has become a focus area for a government. The RBI has obliged with a rate cut, post the budget announcement, indicating that it is presently comfortable with the progress on fiscal consolidation and inflation. We expect the central bank to further ease policy rates over the next year or so, provided inflation remains under control, and any other major exigency does not occur. In a landmark move, the RBI signed a monetary policy framework agreement with the central government, to bring down inflation to a band of 4% (+/- 2%) in the next couple of fiscal years. This will help to formalize the inflation targeting regime in India, going forward. The RBI will also be held accountable if inflation breaches the targeted band as per the monetary policy framework agreement. With the upcoming supply of government paper in the new fiscal year, we may also see some enhancement in foreign portfolio investor (FPI) limits in government securities. To conclude, although we expect bond yields to soften over time, the next leg maybe a bit more muted than the sharp fall in yields we have witnessed since September, last year. From an investment perspective, with yields still remaining elevated at the shorter end, and with the credit environment improving, we continue to remain positive on corporate bonds and accrual strategies. Duration strategies also continue to be favourably placed for 2015, with interest rates poised to come down gradually over time. 10 Year Gilt Call rates Exchange rate (Rs./$) Liquidity Operations - Avg. net injection(+) / net absorption (-) by RBI during the month (in Rs. Bn) 30-Jan /7.95% 61.86/ Feb /7.30% 61.83/ Monetary policy: Post the budget announcement, the RBI went in for a second inter-meeting policy rate cut. It cut the repo rate by 25 bps to 7.50% on March 4, 2015, ahead of the scheduled April 7, 2015 policy meet. Consequently the reverse repo rate stands adjusted to 6.5%, and the bank rate & MSF rate to 8.5%. The Union Budget (incl. fiscal consolidation roadmap), agreement on monetary policy framework, and a still soft but recovering economy, seemed to be the main triggers for the rate cut. 4

5 Franklin India Bluechip Fund FIBCF The fund manager seeks steady and consistent growth by focusing on wellestablished, large size companies An open-end growth scheme with an objective primarily to provide medium to long-term capital appreciation. December 1, 1993 Anand Radhakrishnan & Anand Vasudevan Growth Plan Dividend Plan Direct - Growth Plan Direct - Dividend Plan ` crores TURNOVER Portfolio Turnover 39.33% VOLATILITY MEASURES (3 YEARS) Standard Deviation 4.12 R-squared 0.87 Beta 1.00 Sharpe Ratio* 0.72 * Annualised. Risk-free rate assumed to be 8.09% (based on average of 3 month T-Bill Rate during last 3 months ) EXPENSE RATIO : 2.21% EXPENSE RATIO (DIRECT) : 1.36% The rates specified are the actual average expenses the Service tax on Investment Management Fees. The above ratio also includes, proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net, wherever applicable ` 5000/1 ` 1000/1 ` ` 471 ` ` EXIT LOAD In respect of each purchase of Units - 1% if the Units are redeemed/switched-out within one year of allotment Auto Mahindra & Mahindra Ltd Hero Motocorp Ltd Tata Motors Ltd Bajaj Auto Ltd Auto Ancillaries Exide Industries Ltd Banks HDFC Bank Ltd* ICICI Bank Ltd* Indusind Bank Ltd* Yes Bank Ltd* Kotak Mahindra Bank Ltd* Axis Bank Ltd Bank Of Baroda Punjab National Bank Ltd Cement ACC Ltd Grasim Industries Ltd Ultratech Cement Ltd Construction Project Larsen And Toubro Ltd* Consumer Non Durables Marico Ltd Asian Paints Ltd ITC Ltd Ferrous Metals Jindal Steel & Power Ltd Tata Steel Ltd Industrial Products Cummins India Ltd Minerals/mining Coal India Ltd Oil Oil & Natural Gas Corp Ltd SIP - If you had invested ` 5000 every month in FIBCF... 1 Year 3 Year 5 Year 7 Year 10 Year Since jan 97 Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized. Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken in to consideration. For SIP returns, monthly investment of equal amounts invested on the 1st day of every month has been considered. For scheme performance refer pages *B: Benchmark, AB: Additional Benchmark Petroleum Products Reliance Industries Ltd Bharat Petroleum Corporation Ltd Indian Oil Corp Ltd Pharmaceuticals Dr Reddy'S Laboratories Ltd* Cadila Healthcare Ltd Lupin Ltd Sun Pharmaceutical Industries Ltd Power Torrent Power Ltd Power Grid Corp Of India Ltd Services Aditya Birla Nuvo Ltd Software Infosys Ltd* Cognizant Technology (USA)* Wipro Ltd HCL Technologies Ltd Tata Consultancy Services Ltd Telecom - Services Bharti Airtel Ltd* Idea Cellular Ltd Total Equity Holding Total Equity Holding Total Debt Holding Call, Cash and other current asset Total Asset * Top 10 holdings Total Amount Invested (Rs.) 60, , , , ,000 1,080,000 Total Value as on Dec 31, 2014 (Rs) 71, , , ,107 1,377,751 12,531,973 Returns 39.03% 24.29% 16.58% 16.57% 15.86% 23.49% Total Value of *B:S&P BSE Sensex 68, , , ,173 1,163,447 4,621,470 *B:S&P BSE Sensex Returns 27.39% 21.74% 14.40% 13.45% 12.71% 14.43% Total Value of *AB:CNX Nifty 69, , , ,441 1,165,880 4,570,634 *AB:CNX Nifty returns 29.48% 21.85% 14.51% 13.50% 12.75% 14.33% Sector Allocation - Total Assets REST 11.81% INDUSTRIAL PRODUCTS 1.86% CONSTRUCTION PROJECT 3.40% CONSUMER NON DURABLES 4.75% TELECOM SERVICES 5.42% PETROLEUM PRODUCTS 5.63% CEMENT 5.68% AUTO 6.54% PHARMACEUTICALS 6.73% SOFTWARE BANKS 18.02% 30.15% A fund that invests in large cap stocks (BROWN) HIGH RISK** 5

6 Templeton India Growth Fund TIGF Templeton Equity Portfolio Managers adopt a long term disciplined approach to investing and use the widely known philosophy of value investing An open-end growth scheme withthe objective to provide long-term capital growth to its unitholders September 10, 1996 Chetan Sehgal Growth Plan ` Dividend Plan ` Direct - Growth Plan ` Direct - Dividend Plan ` ` crores TURNOVER Portfolio Turnover 9.95% VOLATILITY MEASURES (3 YEARS) Standard Deviation R-squared 0.76** 0.73 Beta 1.08** 0.85 Sharpe Ratio* **S&P BSE Sensex MSCI India Value * Annualised. Risk-free rate assumed to be 8.09% (based on average of 3 month T-Bill Rate during last 3 months ) EXPENSE RATIO : 2.64% EXPENSE RATIO (DIRECT) : 1.94% The rates specified are the actual average expenses the Service tax on Investment Management Fees. The above ratio also includes, proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net, wherever applicable ` 5000/1 Auto Maruti Suzuki India Ltd.* Tata Motors Ltd., A Auto Ancillaries Balkrishna Industries Ltd Banks ICICI Bank Ltd.* HDFC Bank Ltd.* Federal Bank Ltd.* Cement Grasim Industries Ltd JK Cement Ltd Chemicals Tata Chemicals Ltd.* Consumer Non Durables EID Parry India Ltd Ferrous Metals MOIL Ltd Finance Bajaj Holdings and Investment Ltd.* Tata Investment Corp. Ltd.* Sundaram Finance Ltd Gas GAIL India Ltd Oil Oil & Natural Gas Corp. Ltd Cairn India Ltd Petroleum Products Reliance Industries Ltd.* Pharmaceuticals Dr. Reddy's Laboratories Ltd.* Software Infosys Ltd.* Total Equity Holding Total Equity Holding Total Debt Holding Call, Cash and other current asset Total asset * Top 10 holdings ` 1000/1 EXIT LOAD In respect of each purchase of Units - 1% if the Units are redeemed/switched-out within one year of allotment SIP - If you had invested ` 5000 every month in TIGF 1 Year 3 Year 5 Year 7 Year 10 Year Since Inception Total Amount Invested (Rs.) 60, , , , ,000 1,100,000 Total Value as on Dec 31, 2014 (Rs) 75, , , ,894 1,398,548 9,566,109 Returns 50.03% 28.89% 17.70% 17.04% 16.14% 20.48% Total Value of *B:S&P BSE Sensex 68, , , ,173 1,163,447 4,797,857 *B:S&P BSE Sensex Returns 27.39% 21.74% 14.40% 13.45% 12.71% 14.32% Total Value of *B:MSCI India Value 65, , , ,718 1,013,749 N.A *B:MSCI India Value Returns 18.34% 14.73% 7.95% 8.52% 10.12% N.A Total Value of *AB:CNX Nifty 69, , , ,441 1,165,880 4,754,239 *AB:CNX Nifty returns 29.48% 21.85% 14.51% 13.50% 12.75% 14.24% Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized. Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken in to consideration. For SIP returns, monthly investment of equal amounts invested on the 1st day of every month has been considered. For scheme performance refer pages *B: Benchmark, AB: Additional Benchmark Sector Allocation - Total Assets REST AUTO ANCILLARIES PETROLEUM PRODUCTS OIL CEMENT PHARMACEUTICALS AUTO SOFTWARE CHEMICALS BANKS FINANCE 4.11% 0.86% 4.00% 4.05% 5.30% 6.77% 7.12% 9.16% 15.49% 21.47% 21.66% A fund that invests predominantly in large cap stocks a value fund (BROWN) HIGH RISK** 6

7 Franklin India Prima Plus This is a Simple and Performing scheme which is eligible for distribution by new cadre of distributors. FIPP T h e f u n d m a n a g e r s e e k s c a p i t a l appreciation over the long-term by focusing on wealth creating companies (companies that generate return on capital in excess of their cost of capital) across all sectors. An open end growth scheme with an objective to provide growth of capital p l u s r e g u l a r d i v i d e n d t h r o u g h a diversified portfolio of equities, fixed income securities and money market instruments. September 29, 1994 Anand Radhakrishnan & R. Janakiraman Growth Plan ` Dividend Plan ` Direct - Growth Plan ` Direct - Dividend Plan ` ` crores TURNOVER Portfolio Turnover 32.23% VOLATILITY MEASURES (3 YEARS) Standard Deviation 4.02 R-squared 0.88 Beta 0.87 Sharpe Ratio* 1.29 * Annualised. Risk-free rate assumed to be 8.09% (based on average of 3 month T-Bill Rate during last 3 months ) EXPENSE RATIO : 2.38% EXPENSE RATIO (DIRECT) : 1.45% The rates specified are the actual average expenses the Service tax on Investment Management Fees. The above ratio also includes, proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net, wherever applicable ` 5000/1 ` 1000/1 EXIT LOAD In respect of each purchase of Units - 1% if the Units are redeemed/switched-out within one year of allotment Auto Eicher Motors Ltd Mahindra & Mahindra Ltd Tata Motors Ltd Hero Motocorp Ltd Auto Ancillaries Amara Raja Batteries Ltd* Bosch Ltd Balkrishna Industries Ltd Exide Industries Ltd Banks HDFC Bank Ltd* ICICI Bank Ltd* Indusind Bank Ltd* Yes Bank Ltd* Kotak Mahindra Bank Ltd* Axis Bank Ltd Karur Vysya Bank Ltd/The Federal Bank Ltd Punjab National Bank Ltd Bank Of Baroda Cement Grasim Industries Ltd Ultratech Cement Ltd Chemicals Pidilite Industries Ltd Aarti Industries Ltd Construction Project Larsen And Toubro Ltd Voltas Ltd Consumer Durables Havells India Ltd Consumer Non Durables Marico Ltd United Breweries Ltd Asian Paints Ltd Finance Credit Analysis & Research Ltd Crisil Ltd Gas Petronet LNG Ltd Gujarat State Petronet Ltd Industrial Capital Goods Alstom T&D India Ltd Crompton Greaves Ltd SIP - If you had invested ` 5000 every month in FIPP Total Equity Holding Total Debt Holding Call, Cash and other current asset Total Asset Industrial Products Cummins India Ltd Greaves Cotton Ltd Skf India Ltd Shakti Pumps India Ltd Finolex Industries Ltd Media & Entertainment Jagran Prakashan Ltd HT Media Ltd Minerals/mining Gujarat Mineral Dev Corp Ltd Petroleum Products Reliance Industries Ltd Bharat Petroleum Corporation Ltd Pharmaceuticals Torrent Pharmaceuticals Ltd* Dr Reddy'S Laboratories Ltd Cadila Healthcare Ltd Pfizer Ltd/India IPCA Laboratories Ltd Services Aditya Birla Nuvo Ltd Software Infosys Ltd* Cognizant Technology (USA)* Wipro Ltd HCL Technologies Ltd Telecom - Services Bharti Airtel Ltd* Tata Communications Ltd Transportation Gujarat Pipavav Port Ltd Container Corp Of India Ltd Gateway Distriparks Ltd Unlisted Quantum Information Services Numero Uno International Ltd Total Equity Holding * Top 10 holdings 1 Year 3 Year 5 Year 7 Year 10 Year Since Inception Total Amount Invested (Rs.) 60, , , , ,000 1,210,000 Total Value as on Dec 31, 2014 (Rs) 78, , , ,489 1,629,285 21,315,894 Returns 62.06% 34.94% 23.09% 20.81% 18.97% 24.00% Total Value of *B:CNX , , , ,823 1,162,489 6,308,216 *B:CNX 500 Returns 36.88% 24.64% 15.44% 14.21% 12.69% 14.39% Total Value of *AB:CNX Nifty 69, , , ,441 1,165,880 5,647,465 *AB:CNX Nifty returns 29.48% 21.85% 14.51% 13.50% 12.75% 13.49% Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized. Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken in to consideration. For SIP returns, monthly investment of equal amounts invested on the 1st day of every month has been considered. For scheme performance refer pages *B: Benchmark, AB: Additional Benchmark Sector Allocation - Total Assets REST PETROLEUM PRODUCTS TRANSPORTATION CONSUMER NON DURABLES TELECOM SERVICES INDUSTRIAL PRODUCTS AUTO AUTO ANCILLARIES PHARMACEUTICALS SOFTWARE BANKS 3.51% 3.53% 3.86% 4.16% 4.31% 4.98% 6.11% 7.72% 10.78% 23.49% 27.56% Primarily a large cap fund with some allocation to small/mid cap stocks (BROWN) HIGH RISK** 7

8 Franklin India Prima Fund FIPF The fund manager seeks aggressive growth by focusing primarily on mid and small cap companies. An open-end growth scheme with an objective to provide medium to long term capital appreciation as a primary objective and income as a secondary objective. December 1, 1993 R. Janakiraman & Roshi Jain Growth Plan ` Dividend Plan ` Direct - Growth Plan ` Direct - Dividend Plan ` ` crores TURNOVER Portfolio Turnover 26.47% VOLATILITY MEASURES (3 YEARS) Standard Deviation 4.53 R-squared 0.76 Beta 0.91 Sharpe Ratio* 1.77 * Annualised. Risk-free rate assumed to be 8.09% (based on average of 3 month T-Bill Rate during last 3 months ) EXPENSE RATIO : 2.33% EXPENSE RATIO (DIRECT) : 0.97% The rates specified are the actual average expenses the Service tax on Investment Management Fees. The above ratio also includes, proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net, wherever applicable ` 5000/1 ` 1000/1 EXIT LOAD In respect of each purchase of Units - 1% if the Units are redeemed/switched-out within one year of allotment Auto Eicher Motors Ltd TVS Motor Co. Ltd Auto Ancillaries Amara Raja Batteries Ltd.* Apollo Tyres Ltd Balkrishna Industries Ltd Banks Yes Bank Ltd.* IndusInd Bank Ltd.* Axis Bank Ltd.* HDFC Bank Ltd ING Vysya Bank Ltd Karur Vysya Bank Ltd City Union Bank Ltd Cement JK Cement Ltd ACC Ltd Chemicals Pidilite Industries Ltd.* Construction Sobha Ltd Construction Project Voltas Ltd Larsen & Toubro Ltd Consumer Durables Havell's India Ltd Bata India Ltd Consumer Non Durables Kansai Nerolac Paints Ltd Engineering Engineers India Ltd Fertilisers Coromandel International Ltd Finance Repco Home Finance Ltd Sundaram Finance Ltd LIC Housing Finance Ltd Credit Analysis and Research Ltd Crisil Ltd Gas Gujarat State Petronet Ltd Petronet LNG Ltd Hotels Indian Hotels Co. Ltd SIP - If you had invested ` 5000 every month in FIPF 1 Year 3 Year 5 Year 7 Year 10 Year Since Inception Total Amount Invested (Rs.) 60, , , , ,000 1,265,000 Total Value as on Dec 31, 2014 (Rs) 84, , ,966 1,089,858 1,759,278 26,208,613 Returns 84.86% 47.31% 30.26% 26.80% 20.40% 24.06% Total Value of *B:CNX , , , ,823 1,162,489 6,642,679 *B:CNX 500 Returns 36.88% 24.64% 15.44% 14.21% 12.69% 13.78% Total Value of CNX Midcap 77, , , ,210 1,301,326 N.A CNX Midcap Returns 58.99% 31.03% 18.06% 16.98% 14.80% N.A Total Value of *AB:CNX Nifty 69, , , ,441 1,165,880 6,022,469 *AB:CNX Nifty returns 29.48% 21.85% 14.51% 13.50% 12.75% 13.03% Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized. Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken in to consideration. For SIP returns, monthly investment of equal amounts invested on the 1st day of every month has been considered. For scheme performance refer pages CNX Midcap index has been included as additional benchmark for Franklin India Prima Fund (FIPF) effective May 20, 2013 *B: Benchmark, AB: Additional Benchmark Sector Allocation - Total Assets REST TRANSPORTATION PESTICIDES CEMENT INDUSTRIAL CAPITAL GOODS PHARMACEUTICALS AUTO ANCILLARIES SOFTWARE FINANCE INDUSTRIAL PRODUCTS BANKS 3.24% 3.26% 3.45% 3.46% 4.27% 5.28% 7.80% 8.23% 8.99% 17.03% 34.99% Industrial Capital Goods Bharat Electronics Ltd Thermax Ltd Crompton Greaves Ltd Industrial Products Finolex Cables Ltd.* FAG Bearings (India) Ltd.* SKF India Ltd Greaves Cotton Ltd Media & Entertainment Jagran Prakashan Ltd Minerals/mining Gujarat Mineral Development Corp. Ltd Pesticides Bayer Cropscience Ltd PI Industries Ltd Rallis India Ltd Petroleum Products Bharat Petroleum Corp. Ltd Mangalore Refinery and Petrochemicals Ltd Pharmaceuticals Torrent Pharmaceuticals Ltd.* IPCA Laboratories Ltd Ajanta Pharma Ltd Power JSW Energy Ltd Software Mindtree Ltd.* Cyient Ltd.* HCL Technologies Ltd Eclerx Services Ltd Telecom - Services Bharti Airtel Ltd Textile Products Himatsingka Seide Ltd Transportation Gujarat Pipavav Port Ltd Gateway Distriparks Ltd Unlisted Him Techno Total Equity Holding Total Equity Holding Total Debt Holding Call, Cash and other current asset Total Asset A fund that invests in mid and small cap stocks * Top 10 holdings (BROWN) HIGH RISK**

9 Franklin India Flexi Cap Fund This is a Simple and Performing scheme which is eligible for distribution by new cadre of distributors. FIFCF The fund manager will invest in companies based on a research driven, bottom-up stock selection process, irrespective of their market capitalization and sectors. An open-end diversified equity fund that seeks to provide medium to long term capital appreciation by investing in stocks across the entire market capitalization range. March 2, 2005 Anand Vasudevan, Roshi Jain & R. Janakiraman Growth Plan ` Dividend Plan ` Direct - Growth Plan ` Direct - Dividend Plan ` ` crores TURNOVER Portfolio Turnover 37.57% VOLATILITY MEASURES (3 YEARS) Standard Deviation 4.34 R-squared 0.88 Beta 0.94 Sharpe Ratio* 1.18 * Annualised. Risk-free rate assumed to be 8.09% (based on average of 3 month T-Bill Rate during last 3 months ) EXPENSE RATIO : 2.35% EXPENSE RATIO (DIRECT) : 1.80% The rates specified are the actual average expenses the Service tax on Investment Management Fees. The above ratio also includes, proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net, wherever applicable ` 5000/1 ` 1000/1 EXIT LOAD In respect of each purchase of Units - 1% if the Units are redeemed/switched-out within one year of allotment Auto Mahindra & Mahindra Ltd Maruti Suzuki India Ltd Tata Motors Ltd Hero Motocorp Ltd TVS Motor Co Ltd Auto Ancillaries Amara Raja Batteries Ltd* Balkrishna Industries Ltd Banks HDFC Bank Ltd* Yes Bank Ltd* ICICI Bank Ltd* Axis Bank Ltd Kotak Mahindra Bank Ltd State Bank Of India Indusind Bank Ltd Cement Grasim Industries Ltd ACC Ltd Construction Project Larsen And Toubro Ltd* Consumer Durables Titan Co Ltd Consumer Non Durables Glaxosmithkline Consumer Healthcare Ltd United Spirits Ltd Kansai Nerolac Paints Ltd Kaveri Seed Co Ltd Ferrous Metals Jindal Steel & Power Ltd Finance Credit Analysis & Research Ltd Repco Home Finance Ltd SIP - If you had invested ` 5000 every month in FIFCF Total Equity Holding Total Debt Holding Call, Cash and other current asset Total Asset * Top 10 holdings 1 Year 3 Year 5 Year 7 Year Since Inception Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized. Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken in to consideration. For SIP returns, monthly investment of equal amounts invested on the 1st day of every month has been considered. For scheme performance refer pages *B: Benchmark, AB: Additional Benchmark Gas Gujarat State Petronet Ltd Petronet LNG Ltd Industrial Products Greaves Cotton Ltd SKF India Ltd Petroleum Products Bharat Petroleum Corporation Ltd* Pharmaceuticals Torrent Pharmaceuticals Ltd* Dr Reddy'S Laboratories Ltd* Cipla Ltd Cadila Healthcare Ltd Power Torrent Power Ltd KEC International Ltd Software Cognizant Technology (USA)* HCL Technologies Ltd* Infosys Ltd Mindtree Ltd Wipro Ltd Cyient Ltd Telecom - Services Bharti Airtel Ltd Idea Cellular Ltd Transportation Gujarat Pipavav Port Ltd Total Equity Holding Total Amount Invested (Rs.) 60, , , , ,000 Total Value as on Dec 31, 2014 (Rs) 77, , , ,813 1,500,865 Returns 58.52% 35.29% 22.56% 20.75% 18.09% Total Value of *B:CNX , , , ,823 1,124,811 *B:CNX 500 Returns 36.88% 24.64% 15.44% 14.21% 12.61% Total Value of *AB:CNX Nifty 69, , , ,441 1,126,110 *AB:CNX Nifty returns 29.48% 21.85% 14.51% 13.50% 12.63% Sector Allocation - Total Assets REST 16.10% PETROLEUM PRODUCTS 2.73% TELECOM SERVICES 3.30% CEMENT 4.17% AUTO ANCILLARIES 4.79% CONSTRUCTION PROJECT 4.98% CONSUMER NON DURABLES 5.88% AUTO 7.11% PHARMACEUTICALS 10.50% SOFTWARE 12.90% BANKS 27.55% A fund that invests in stocks of companies across the market cap range (BROWN) HIGH RISK** 9

10 Franklin India High Growth Companies Fund FIHGCF The fund manager seeks high growth by focussing on companies/sectors with high growth rates or potential. An open-end diversified equity fund that seeks to achieve capital appreciation through investments in Indian companies/ sectors with high growth rates or potential. July 26, 2007 Roshi Jain & R. Janakiraman Growth Plan ` Dividend Plan ` Direct - Growth Plan ` Direct - Dividend Plan ` ` crores TURNOVER Portfolio Turnover 61.56% VOLATILITY MEASURES (3 YEARS) Standard Deviation 4.55 R-squared 0.81 Beta 0.94 Sharpe Ratio* 1.74 * Annualised. Risk-free rate assumed to be 8.09% (based on average of 3 month T-Bill Rate during last 3 months ) EXPENSE RATIO : 2.37% EXPENSE RATIO (DIRECT) : 1.18% The rates specified are the actual average expenses the Service tax on Investment Management Fees. The above ratio also includes, proportionate charge in respect sales beyond T-15 cities subject to maximum of 30 bps on daily net, wherever applicable ` 5000/1 ` 1000/1 EXIT LOAD 1% if redeemed/switchedout within two years of allotment Auto Maruti Suzuki India Ltd* Tata Motors Ltd* Tvs Motor Co Ltd Banks Axis Bank Ltd* State Bank Of India* ICICI Bank Ltd* HDFC Bank Ltd* Yes Bank Ltd Bank Of Baroda Cement Orient Cement Ltd Jk Lakshmi Cement Ltd Consumer Durables Whirlpool Of India Ltd* Hitachi Home & Life Solutions Ltd Consumer Non Durables Glaxosmithkline Consumer Healthcare Ltd Kansai Nerolac Paints Ltd Finance Shriram Transport Finance Co Ltd Hotels EIH Ltd Industrial Capital Goods Bharat Electronics Ltd Schneider Electric Infrastruture Ltd Industrial Products Timken India Ltd SKF India Ltd Fag Bearings (India) Ltd Pesticides Bayer Cropscience Ltd SIP - If you had invested ` 5000 every month in FIHGCF Pharmaceuticals Total Equity Holding Total Debt Holding Call, Cash and other current asset Total Asset Sanofi India Ltd Cipla Ltd Dr Reddy'S Laboratories Ltd Torrent Pharmaceuticals Ltd IPCA Laboratories Ltd Software Tata Consultancy Services Ltd* Tech Mahindra Ltd* Cognizant Technology (USA) Mindtree Ltd Cyient Ltd Telecom - Services Idea Cellular Ltd* Bharti Airtel Ltd Transportation Gateway Distriparks Ltd Total Equity Holding * Top 10 holdings 1 Year 3 Year 5 Year 7 Year Since Inception Total Amount Invested (Rs.) 60, , , , ,000 Total Value as on Dec 31, 2014 (Rs) 86, , ,139 1,045,461 1,123,454 Returns 89.48% 47.57% 29.73% 25.62% 23.83% Total Value of *B:CNX , , , , ,921 *B:CNX 500 Returns 36.88% 24.64% 15.44% 14.21% 13.19% Total Value of *AB:CNX Nifty 69, , , , ,480 *AB:CNX Nifty returns 29.48% 21.85% 14.51% 13.50% 12.61% Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized. Dividends are assumed to be reinvested and bonus is adjusted. Load is not taken in to consideration. For SIP returns, monthly investment of equal amounts invested on the 1st day of every month has been considered. For scheme performance refer pages *B: Benchmark, AB: Additional Benchmark Sector Allocation - Total Assets REST CEMENT CONSUMER NON DURABLES INDUSTRIAL CAPITAL GOODS CONSUMER DURABLES INDUSTRIAL PRODUCTS PHARMACEUTICALS TELECOM SERVICES AUTO SOFTWARE BANKS 2.97% 4.18% 4.22% 4.26% 5.64% 7.05% 7.11% 11.97% 13.31% 17.92% 21.37% A fund that invests in stocks of companies/ sectors with high growth rates or above average potential (BROWN) HIGH RISK** 10