| Background: Franklin India Taxshield was launched in April 1999 and is currently the largest tax-planning fund in its category. |
| Investment of up to Rs 10,000 annually entails a tax rebate under Section 88 and carries a three-year lock-in period. The fund charges an entry load of 2 per cent. |
| Performance: The fund has delivered the goods with relatively greater stability vis-à-vis its peers. It is not at the top right now. |
| But it flaunts a compelling long-term record. The fund's total return over the five-year term has been 40 per cent a year - a superlative performance by any standard. |
| Largely maintaining a large-cap bias, it has ridden bull markets with the same ease with which it faced bear phases, becoming a relatively low volatile tax-planning fund. In 2003, it gained 101 per cent. |
| Portfolio: The fund has largely followed a buy-and-hold strategy. For instance, its top holdings like HPCL, SBI and Infosys have remained since 2000. |
| Even when Infy tumbled in April 2003, the fund stuck to it and reduced the exposure only when Infy's price climbed to pre-April levels. |
| From the start, technology has found a prominent place in the fund's portfolio. Launched before the tech-led bull-run, it fully capitalised on the boom on the back of a tech-heavy portfolio (70 per cent in January 2000). |
| This led to huge inflows into the fund - its unit capital swell 10 times in 2000. Consequently, it was among the three funds that ended 2000 on a positive note. |
| In the next three years, tech has moved in and out of favour and the portfolio has attained diversity. This, along with higher exposure in defensive sectors like FMCG and pharma, saved the fund from taking a hit when tech collapsed in early 2001. |
| Moreover, post-9/11, the fund's higher exposure to tech and PSU stocks helped it recover most of the early losses and it was at the top. But when large-caps lost momentum in 2002, its returns landed in the middle of the performance chart. |
| However, it managed to outperform the benchmark S&P CNX 500, supported by its lower concentration in FMCG - the worst performing sector of 2002. |
| In 2003, though the fund gained 101 per cent, it underperformed the category despite being in line with the benchmark due to its low exposure to mid-caps and love for tech stocks. |
| Outlook: Franklin India Taxshield is meant for keeps for its diversity and consistent investing style. |
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