Franklin India Smaller Companies Fund was launched on January 13th, 2006 by Franklin Templeton Investments. The primary objective of the scheme is to provide long-term capital appreciation by investing in mid and small cap companies. The Franklin Smaller Companies Fund is a plan devised by exhaustive market research by expert fund managers.
Franklin India Smaller Companies Fund growth was a closed-ended equity scheme that has been converted into an open-ended scheme with effect from January 14th, 2011. The fund defines smaller (small and mid-cap) companies as the ones which have a market capitalization below that of 100th stock in the CNX 500 index. The Franklin Smaller Companies Fund focuses on the small capitalization spaces that have high growth and are ready to take on the market in future thus, resulting into substantial capital appreciation over time.
The Franklin Smaller Companies Fund is composed of cash and cash equivalents, equity and fixed income. 75% of the assets in this scheme are invested in corporates that have small market capitalization. The plan allocates its funds into various sectors such as industrial products, banks, finance, construction, software, media and entertainment, and chemicals.
As of November, 2016, the top ten holdings for the Franklin India Smaller Companies Fund (G) are:
- Finolex Cables Ltd
- Equitas Holdings Ltd
- Yes Bank Ltd
- Repco Home Finance Ltd
- Eclerx Services Ltd
- Voltas Ltd
- Healthcare Global Enterprises Ltd
- Mahanagar Gas Ltd
- Fag Bearings India Ltd
- HDFC Bank Ltd
Franklin Smaller Companies Fund is assessed against the benchmark S&P CNX Midcap, along with S&P CNX Nifty. The Franklin smaller companies plan has been performing remarkably, and the scheme is ranked number one in the small and mid-cap category by CRISIL for quarter ended September 2016. This rating by CRISIL has been unchanged from the last quarter.
The statistics of cumulative performance since the inception of the scheme is mentioned below:
- The compounded interest annualized growth rate performance for the last two years of Franklin India Smaller Companies Fund is 20.66%. The compounded interest annualized growth for S&P CNX Midcap is 16.66% and for S&P CNX Nifty is 3.97%
- The current value of standard investment of Rs. 10,000 of the fund for the last two years amounts to Rs. 14.565. The current value of standard investment for S&P CNX Midcap is Rs. 13,499 and for S&P CNX Nifty is Rs. 10,812
As per February 19th, 2016, the value of dividend and direct dividend per unit for the Franklin India Smaller Companies Growth Fund amounts to Rs. 2.0000. Franklin India Smaller Companies Fund growth NAV for dividend and direct dividend sums upto Rs. 22.7612 and Rs. 23.5553.
This Franklin Smaller Companies Fund is suitable for investors who are seeking long term capital appreciation through a fund that invests primarily in small and mid-cap companies. Also, the investors who are comfortable with high-risk high reward equation and are willing to invest for long-term to benefit from the full investment cycle can opt for this fund. Franklin India Smaller Companies Fund is fit for investors with a relatively higher risk appetite, given the volatile nature of small and mid-cap stocks over the short term with an ideal investment horizon of 3-5 years. It is a growth-oriented plan which focusses on providing hike in the level of income.
The Franklin India Smaller Companies Fund growth holds a five-star rating and stands on a superior level in the market by defying market volatility. The plan seeks for entities that can perform better from their current status, thus keeping the cost and benefits of the investors equitable during the allocation of funds.