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Templeton India Growth Fund

Dhirendra Kumar

Templeton India Growth Fund (TIGF) is a diversified equity fund launched in August 1996. The fund charges an entry load of 2 per cent for investments less than Rs 200,000, while redemption for the same slab is on a no-load basis if held for a year. The fund paid its maiden dividend of 15 per cent in April 2000.

FUND BASICS   Objective    Size (Cr)    NAV:8/5/2001    Exit Price    Entry Price    Total Return   Growth   136.69   11.94   11.94   12.18   6.34%

    It has been a case of gradual adaptation for TIGF. Guided by value investing and bottom-up stock picking strategy, the fund started scouting for companies, which are selling at a discount to their five-year potential. While it held on to blue-chip diversified cyclical stocks, this segment was completely out of favour and remained in bear grip till 1998.

Under pressure from its sustained under-performance, TIGF revisited its investment strategy and changed tack in late 1998. The fund started to take exposure in intangible/knowledge-based industries - it took exposure to Satyam Computer and Ranbaxy. However, significant exposure to technology counters came late in 1999 when the rally started, and the allocation averaged at a third of the corpus in 2000.

The rest of the portfolio is well-spread across cyclicals such as diversified industry groups, consumer stocks, automobile and energy stocks. Interestingly, while the fund spread to growth stocks in technology, it held few pharma stocks. The tech exposure notwithstanding, the fund still holds large cap portfolio, with a blend of growth and value.

BENCHMARK COMPARISONS (%) (04/05/2001)      1M    3M    6M    1Yr    3Yr   Fund   4.19   -12.95   -1.35   -6.55   7.65   BSE Sensex   -1.43   -19.25   -10.70   -22.82   -5.28   Nifty Tot. Ret.   -0.41   -17.90   -8.84   -17.75   -0.37   Obj. Avg.   1.22   -22.04   -17.03   -25.70   3.68

Clearly, with the fund getting its act together later in the day, its returns since launch still look insipid at 6.34 per cent. While the fund lagged its aggressive peers in 1999, its day under the sun came in 2000 -- when the fund held ground with a diversified portfolio. Also, the re-orientation since 1998 has seen the fund joining the topper's league with a splendid two-year performance at 32.63 per cent against a category average 5.89 per cent.

While getting liberal with its value investing philosophy, the fund has not strayed from its diversified blue-chip portfolio. This has also seen the fund emerge a steady performer with a lower downside risk. With the results starting to trickle in for Templeton India Growth Fund, it could well end up as a candidate for a core holding, if it continues with its reworked ideology.

Top Holdings (30/04/2001)      Value (Cr)    % of Assets   Reliance Industries   5.87   8.03   Hughes Software Systems   4.21   5.76   Grasim Industries   4.10   5.61   ITC   3.81   5.21   Hindalco Industries   3.54   4.84   Cipla   3.39   4.64   Infosys Technologies   3.39   4.64   SmithKline Beecham Cons Health   3.29   4.50   Bharat Petroleum Corporation   3.15   4.31   National Aluminium Company   3.05   4.17

Source: Value Research

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