Fund of Fortnight

Reason for recommendation

Franklin India Prima Fund - Direct Plan (Growth)


After nearly two years of underperformance against the large-cap, mid-cap stocks are looking to outperform their larger counterpart. The worst seems to be behind us for mid-cap companies in the last one month and three-month period, as they have outperformed large-cap indices and the same is reflected in the funds dedicated to such companies. In this situation, it is always better to trust your money with a mid-cap fund that has longer history. Franklin India Prima Fund is one of the oldest equity funds in India with a history of more than 25 years. Launched on December 01, 1993, it has seen more market cycles than any other funds in its category. Since its inception, the fund has generated an annualised return of 19.52 per cent. This means for every Rs 1 lakh invested in the fund at its launch would have now become Rs 98 lakh. The fund identifies and invests in mid-cap companies at an early stage of the business cycle as they have a greater potential for growth. The fund is well-diversified with a total of 63 stocks at the end of December 2019. The top 10 stocks hold only 27.34 per cent of the total assets. Going ahead what will work in favour of the fund, is its less weightage to frontline financial companies, which have not delivered results in their latest quarter and are lagging in terms of performance. Taking contra bet, the fund is overweight on automobile sector, which has outperformed the Sensex in the last six months. Therefore, if recovery in the auto sector continues then, it’s expected to perform well. The fund is well-suited to someone who can take higher risk and has a long-term investment horizon of five years.