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S. Vaidya Nathan

INVESTMENTS can be contemplated with a one-to-two year perspective in Franklin India Prima Plus. But investing can be made in a phased manner, perhaps using the systematic investment plan, to take advantage of price declines in the broad market.

The fund has a fairly impressive and consistent track record. In the past six months, it has outperformed the broad market but has trailed quite a few other schemes. Most of the latter, however, do not have a consistent track record.

Prima Plus has generated returns of about 27.4 per cent and 6.2 per cent over the last five years and three years respectively.

In the last three months, the NAV appreciated about 30 per cent. The portfolio at the end of June 2003 had a mix of large-cap and mid-cap stocks that could deliver value. The fund is more or less fully invested, with close to 96 per cent of assets in equities.

Suitability: Prima Plus carries a slightly higher level of risk compared to the typical diversified equity fund. Its aggressive fund management style — involving holdings in a large number of sectors and stocks and a high portfolio turnover ratio — has, however, delivered more-than-adequate returns to compensate for the risks involved.

Going forward, the investment strategy is unlikely to change. But the unknown variable is the possible merger of Franklin India Growth Fund with Prima Plus.

This had been indicated when Frankin Templeton acquired Pioneer ITI. But, so far, no concrete moves have been made on this front. Investors can stay in the dividend option due to tax advantages in 2003-04.

Dividends declared by equity schemes are exempt from tax.

Portfolio status: The fund has a more diversified portfolio now than at the turn of 2003. Then it was saturated with IT and pharmaceutical stocks. Pharma stocks continue to be the bedrock of the portfolio with a share of about 19 per cent of net assets.

A tilt towards Indian pharma companies is clear, with just Aventis and Pfizer figuring from MNC pharma stocks. In IT and banking, the fund is largely into frontline banking stocks.

Large-cap stocks dominate the portfolio. But the fund now also has a larger exposure to mid-cap stocks than in the past.

Prominent mid-cap holdings include Indian Rayon, GAIL, CRISIL, Indian Hotels, Sun Pharma, Moser Baer, Asian Paints and Television 18.

: Prima Plus was launched in September 1994. The minimum investment amount is Rs 5,000. The entry load is 2 per cent. There is no exit load. Expenses are about 2.4 per cent of net assets. The fund has an asset base of Rs 213 crore. The fund manager is Mr R. Sukumar.<137>

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