Mutual funds have become a very critical aspect of the money market. With new investors beginning to put their money into better use, mutual funds provide a low-risk option for them. Mutual funds make it easier for investors to avoid the hassle of constantly watching for changes in the stock market, researching where to invest and other such questions.
Mutual fund schemes serve as financial intermediaries, where funds are managed by professional fund managers. Since mutual funds combine a large pool of investors into one single pool, investors get economies of scale.
Mutual funds are offered in equity, debt or hybrid schemes. One such fund house is Franklin Templeton. Here is a guide on how to invest in Franklin Templeton Mutual Funds.
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About Franklin Templeton
Franklin Templeton Asset Management India Pvt. Ltd. was incorporated in 1995, and currently boasts of a presence in over 28 countries. It launched its first mutual fund scheme – the Templeton India Growth Fund in September 1996. Over the next two decades, the company has recorded steady growth.
Anand Radhakrishnan is the chief investment officer of Franklin Templeton, managing all the equity-related funds. He has been in the industry since 1994.
1. Assets Under Management (AUM)
AUM is the measure of how many people have subscribed to the fund. The higher the AUM, the better. It does not reflect the performance or returns but is indicative of the confidence investors have in the fund.
As of March 2019, Franklin Templeton had AUM of Rs. 118,912 crores, which is one of India’s highest.
2. Tax Benefits
Under section 80C of the Income Tax Act, 1961, investment in mutual funds can offer several tax benefits. Franklin Templeton provides investors with an ELSS (equity-linked savings scheme) fund, called Franklin India Taxshield, where you can avail tax benefits of you invest up to Rs. 1.5 lakhs per year.
How to invest in Franklin Templeton Mutual Funds?
To start investing in Franklin Templeton funds, you need to be KYC compliant. Submit your application to the registrar or mutual fund house, or register online.
Before investing, take into consideration your long and short-term goals, age, risk-taking ability and the time you’re willing to invest for. After carefully studying, choose the plan that suits you the best!
Schemes offered by Franklin Templeton
The company offers more than 35 Mutual Funds schemes which are equity, debt as well as hybrid schemes. Some of the schemes of Franklin Templeton are as follows:
#1 Franklin India Ultra Short Bond Fund: This mutual fund scheme invests in a mix of short-term debts and other money market instruments. The asset allocation is 70.31% in debt, 22.69 in cash, and remaining in others. (Source) With a moderate risk involved, it has an annualized return of 9%. The Net Asset Value, (i.e. the price at which units of mutual funds are bought and sold) has been recorded at Rs. 27.3163 in August 2019. The expense ratio (i.e. the percentage of funds that is spent for administrative purposes in managing your funds) is 0.44% – a healthy low for investors. This fund is managed by Santosh Kamath. The exit load (i.e. the amount charged by the company from investors for leaving a scheme) is NIL.
#2 Franklin India Low Duration Fund: This mutual fund scheme also primarily deals in debt with few investments in cash and others. The asset allocation mix is 73.06% in debt, 21.23% in cash and 5.71% in others. There’s a moderate risk in this scheme while it offers an annualized return of 9.2%. Recent NAV is Rs. 22.2726. The expense ratio for this Franklin Templeton Fund is also on the lower side at 0.51%. Santosh Kamath manages this fund too, with exit load specified at 0.5% for within 3 months, and NIL post that.
#3 Franklin India Dynamic Accrual Fund: This scheme helps you to get a steady income. It relies on the power of compounding, where investors do not get any dividends but are instead offered enhanced capital appreciation. A major part of this fund is invested in debt/ fixed income securities. This too has moderate risk and an annualized return of 8.4%. With a recent NAV of Rs. 68.0473, the expense ratio for this scheme is 1.77%, which is in the normal range. Exit load varies within a 48 month period, post which it is NIL.
#4 Franklin India Debt Hybrid Fund: The objective of this fund is to give you the benefits of high-quality steady income, while also giving some exposure to equity. 64.76% of investments are in debt, 20.33% in equity and 9.14% in cash. The risk involved is moderate with an annualized return of 9.6%. The expense ratio is 2.28%, and the exit load is 1% up to 1 year and NIL after that. The manager of this fund is Krishna Natarajan.
#5 Franklin India Equity Hybrid Fund: This fund is a balanced fund with some inclination to equity. It is aimed to provide you with a good current income as well as some capital appreciation by investing in fixed-income securities. 69.5% of this fund is invested in equity, 28.29% in debt and remaining in others. The risk involved is moderately high but it has an annualized return of 13.2%. The expense ratio for this fund is 2.48%. This fund is managed by Krishna Natarajan.
Other than these, there are various other funds with different investment allocations that you can choose according to your investment goals. Needless to say, funds of Franklin Templeton has performed well in past years. If you’re looking to get started with investments, Franklin Templeton’s Mutual Fund schemes are an ideal place to start. If you’re a seasoned investor looking to diversify, again, Franklin Templeton’s Mutual Fund schemes should be on your radar.