Standing the test of time

FUND ANALYSIS: Franklin India Prima

What makes this fund interesting is that it has been around for years. A look at the long-term performance puts the fund in a very good light.

It has long been among the first choices when it comes to a mid-cap fund and has seen its assets soar from just Rs 33 crore at the end of 2000 to over Rs 1,813 crore as on December 31, 2006.

In 2001, it was declared the hottest fund. This was no mean feat since it took a hammering the year before. In 2000, it lost 44.88 per cent while the Nifty was down by just 14.65 per cent.

The fund managed to find its place in the top quartile of the category in each calendar year till 2006, when it slackened a bit. Its trailing five-year return as of January 23, 2007 stood at 58.41 per cent, much higher than the average return of diversified equity funds (43.20 per cent) and the Sensex (33 per cent).

But if you look at the near-term performance over the last one year, the results are disappointing with the fund placed in the bottom quartile.

Over the past one year, the fund has shown a tendency of rising less than the average peers, when the markets went up and falling relatively lesser, when markets were in red.

Don't be quick to shun this fund, based simply on its recent dismal performance. Especially, if you are looking at a mid-cap offering, you should consider this fund.

A big positive is the continuity of fund manager K N Siva Subramanian, one of the finest brains in the fund industry.

The fund manager subscribes to the buy-and-hold strategy. He has faithfully stuck with certain stocks such as Torrent Pharmaceuticals, Cummins India and Raymond which have worked in his favour.

Currently, the fund holds a portfolio of 47 stocks, with significant investments in Jai Prakash Associates (10.23 per cent) and Aditya Birla Nuvo (7.32 per cent).

While concerns over its size have now started to emerge, there are reasons to stay invested. Its exceptional management is capable of steering it out of the little spot of bother it has landed in.