Turning 30 and still going strong: How Franklin Templeton built wealth in its two oldest schemes

Franklin-Templeton

The two oldest schemes of Franklin Templeton India Asset Management Co Ltd, Franklin India Bluechip Find (FIBF) and Franklin India Prima Fund (FIPF), recently turned 30. Both FIBF and FIPF were launched in December 1993. If you had invested Rs 1,000 in FIBF through Systematic Investment Plan (SIP) every month, you would have made Rs 1.14 crore, or a return of 18.31 percent, as of February 12. A SIP of Rs 1,000 in FIPF would have become Rs 1.78 crore; a return of 20.4 percent on a compounded basis.

Both FIBF and FIPF were launched by the erstwhile Kothari Pioneer Asset Management Co (AMC) Ltd; these were the first two schemes launched by the fund house after Kothari Pioneer became the first private sector fund house, at the time, to enter the nascent Indian mutual funds industry. Eventually, Franklin Templeton AMC acquired Kothari Pioneer Asset Management Co (AMC) in July 2002.

The entry of Franklin Templeton Mutual Fund ushered in an era of private-sector mutual funds in the industry. At the time (in 1993), the Indian MF industry had just nine fund houses, with collective assets under management worth Rs 47,000 crore. With private sector fund houses, came innovations like SIPs, Systematic Transfer Plans, debt funds and so on. Although the Securities and Exchange Board of India (SEBI) mutual fund guidelines have been in place since 1992, they took a more formal shape in the form of a regulation in 1996.

FIBF and FIPF have done reasonably well over longer periods. Although FIBF has underperformed periodically when markets have moved up narrowly. FIBF is a large-cap oriented fund and FIPF is a mid-cap fund. Its former fund managers Sivasubramanian KN (now retired) and Anand Radhakrishnan (now, Chief Executive Officer of Sundaram Asset Management Co Ltd) have consistently stayed away from momentum-based sectors and stocks. Infosys Ltd, Larsen & Toubro Ltd, ICICI Bank Ltd, Bharti Airtel Ltd and HDFC Bank Ltd have been in FIBF’s portfolio for more than 15 years, as per a Moneycontrol analysis.

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FIPF remains one of the industry’s oldest mid-cap funds. IPCA Laboratories, Kansai Nerolac Paints, Torrent Pharmaceuticals, Gujarat State Petronet and Voltas have consistently been a part of FIPF’s portfolio for more than 15 years, as per a Moneycontrol analysis.

The fund house went through a rough patch during COVID-19 years when it chose to wind up six of its debt funds on account of illiquidity in the debt markets at the time. Eventually, Franklin Templeton paid off its unit holders for roughly three years. And then in August 2023, it hired Rahul Goswami to head its India fixed-income team. Goswami came from ICIC Prudential Asset Management Co Ltd.

At the press conference held to commemorate FIBF and FIPF turning 30, Avinash Satwalekar, head of Franklin Templeton India said that the fund house will launch new debt funds this year.

(With inputs from Dhuraivel Gunasekaran)