Friday May 4, 05:40 PM
Franklin Templeton Capital Protection Oriented Fund |
|
By Personalfn.com
Summary
Type : Capital Protection
Benchmark : CRISIL (CRSL.BO, news) MIP Blended Index
Min. Investment : Rs 10,000
Face Value : Rs 10
Entry Load : Nil
Exit Load : Nil
Issue Opens : April 24, 2007
Issue Closes : May 17, 2007
Investment Objective*
Franklin Templeton Capital Protection Oriented Fund (FTCPOF) is a capital protection oriented fund that endeavours to protect the capital by investing in high quality fixed income securities as the primary objective and generate capital appreciation by investing in equity and equity related instruments as a secondary objective.
*Source: Offer document
Is this fund for you?
FTCPOF is a close-ended capital protection oriented fund. It offers two options to investors - a 3-Yr plan and a 5-Yr plan. It proposes to protect capital by investing in high quality fixed income securities along with equities for growth potential.
FTCPOF is the first series of the primary scheme i.e. Franklin Templeton Capital Safety Fund (FTCSF) launched in October 2006. Like its predecessor, the fund aims to structure its portfolio in a manner that allows investors to (at least) recover the amount invested (principal amount) on maturity i.e. investors can recoup Rs 100 for every Rs 100 invested.
The fund offers two options - 3 and 5 year plans to suit investors with varying risk appetites and investment horizons. The 3-Yr plan will have an equity component of upto 19%, while the 5-Yr plan will have an equity component of upto 29%. Both the plans are capital protection oriented; the longer tenure in the 5-Yr plan allows the fund manager to hike the investment ceiling for equities.
At the outset, investors must note that although the fund aims to provide capital protection, returns are not guaranteed and even the principal is guaranteed only implicitly. Having said that, the fund offers investors with a conservative risk appetite an opportunity to invest in market-linked instruments while preserving capital (to the extent permitted by the fund's structure). The fund can also find place in the portfolios of high-risk investors who wish to invest a part of their monies in relatively safe avenues. Since it's a close-ended fund, investors must only invest that part of their investible surplus, which can be set aside for a 3-5 Yr time frame.
Portfolio Strategy
FTCPOF offers two plans with 3-Yr and 5-Yr investment horizons. The 3-Yr plan can invest upto 19% of its corpus in equity/equity-linked instruments while the rest (81%-100%) will be held in debt and money market instruments. Conversely, the 5-Yr plan can invest a higher portion (upto 29%) of its corpus in equities/equity-linked instruments and balance (71%-100%) in debt and money market instruments.
The fund intends to pursue a flexible investment style for the equity component; simply put, it will invest in stocks across sectors and market segments. On the debt side, it will invest in high quality (AAA or similar rated instruments) debt instruments. As is mandatory for capital protection oriented funds, FTCPOF has obtained an 'AAA(so)' rating from CRISIL.
| Instruments |
3-Yr Plan |
5-Yr Plan |
| Equity and equity-linked instruments |
0%-19% |
0%-29% |
| Money market instruments |
81%-100% |
71%-100% |
Fund Manager Profile
Mr. Anand Radhakrishnan, Fund Manager, is B.Tech. He also holds a PGDM (IIM) and is a CFA. He will be responsible for managing the equity portion of FTCPOF. Before joining Franklin Templeton Mutual Fund he was associated with Sundaram Mutual Fund among other companies.
Mr. Ninad Deshpande, Fund Manager, is B.E. and holds a MMS (JBIMS). He will be responsible for managing the debt component of FTCPOF. Prior to joining Franklin Templeton Mutual Fund he was associated with Bank of Bahrain & Kuwait.
Outlook
FTCPOF will likely benefit from the well-defined investment processes practised at Franklin Templeton Mutual Fund. Over the years, select equity and debt funds from Franklin Templeton Mutual Fund have established their credentials over market cycles. FTCPOF will likely be managed in the same way with similar results.
Being a conservatively structured fund, FTCPOF should witness lower volatility over its investment tenure, suiting the conservative investor's risk profile snugly.
|
