Franklin Templeton Mutual Fund on July 8, 2024, launched Franklin India Multi Cap Fund (FIMCF), a multi-cap diversified equity fund that invests in a mix of large-cap, mid-cap and small-cap companies. FIMCF will maintain a minimum exposure of 25 per cent of its total assets in each market cap category namely, large-cap, mid-cap and small-cap, in line with the Securities and Exchanges Board of India regulatory requirements.
Multi-cap funds can go overweight in any category as long as the minimum allocation of 25 per cent is maintained. The remaining 25 per cent will be blended most optimally based on an internal framework, the fund house said. The scheme follows the benchmark Nifty 500 Multicap 50:25:25 Index.
NFO Details
The New Fund Offer runs from July 8, 2024, to July 22, 2024, during which units will be available at Rs. 10 per unit. The scheme re-opens for continuous sale and repurchase on July 31, 2024.
The minimum application amount is Rs.5,000 and the additional purchase is Rs. 1,000 thereafter. An exit load of one per cent is imposed if units are redeemed on or before 1 year from the date of allotment.
Investment Philosophy
The fund seeks to leverage themes in the portfolio like energy transition, financialization of savings, formalization of the economy, disruption by digital companies, manufacturing revival etc, the fund house said.
The fund will apply its bottom-up QGSV stock-picking framework, emphasising (Quality, Growth, Sustainability, and Valuation) to find the right ideas within these themes and sectors.
Multi-cap funds have fund manager restrictions in place to limit human judgmental errors, however, the specific allocation restrictions across market caps will affect the manager's flexibility to reallot to another sector. This may also impact their ability to generate alpha. Multi-cap funds depending heavily on mid-cap and small-cap stocks for growth could pose risks, as these segments are riskier compared to large-caps.
Says Janakiraman R, Chief Investment Officer – Emerging Markets Equity-India, Franklin Templeton, “India’s economy is poised for strong growth over the medium term, thanks to robust macro fundamentals, improving inflation trends, prudent fiscal policies and political stability. Post Covid, the bright growth outlook has led to strong performance in the equity markets."
"FIMCF is designed to capture growth in various market sectors, particularly the small and midcap space, areas which are often under-represented in traditional equity funds," Janakiraman said.
As of July 8, 2024, 19 funds listed on Amfi's website in the multi-cap fund category show category average returns of 51.11 per cent over the one year. Nine funds are over three years old with category average returns of 25 per cent.
