Staying focused

FUND PICK: Franklin India Prima Plus

The fund seems to be reliable in terms of stability of returns.

Franklin India Prima Plus was launched in September 1994. The fund charges an entry load of 2.25 per cent. There is no exit load. The minimum investment is Rs 5,000 and subsequent investments could be made in the multiples of Rs 1,000.

The fund gets the job done. Surviving through the IPO and technology boom and the bust, it has proven its worth.

Launched around the peak of the IPO boom, Prima Plus started as a stock collector. By March 1996, the fund's portfolio was totally out of focus with nearly 200 stocks in its kitty, including many small-cap and illiquid issues.

Despite relentless cleaning of the portfolio, the fund took nearly four years to consolidate. Since 1998, it has been focusing on large- and mid-caps and to a more manageable number of issues "� 45-53 in the last two years.
 

Top holdings
As on June 30, 2005	Value (Cr)	Net assets (%)
Infosys Technologies	29.52	6.26
NDTV	24.64	5.23
Hindalco Inds	20.88	4.43
Kotak Mahindra Bank	18.73	3.98
Motor Industries Co	18.45	3.92
Grasim Industries	18.24	3.87
Nestle India	17.99	3.82
Bajaj Auto	17.81	3.78
Oil & Natural Gas Corp	17.81	3.68
Tata Consultancy Services	16.29	3.46
Television Eighteen India	16.01	3.40
ACC	15.67	3.33
ICICI Bank	14.54	3.09
Flextronics Software Systems	12.43	2.64
Asian Paints	12.00	2.55
TV Today	11.77	2.50
Larsen & Toubro	10.87	2.31
Maruti Udyog	10.67	2.27
Tata Tea	9.85	2.09
Madras Cements	9.26	1.97

A sharpened portfolio focus ahead of the market rally saw the fund turn in stupendous returns in 1998 and 1999. It grew at a fast pace to make up for initial losses with big bets in technology, some of which "� such as Satyam, Hughes, Zee and Mastek "� went awry.

Losing nearly 32 per cent in 2000 made it conservative, with high concentration on large-caps. In 2001, it fared much better, losing only 5.44 per cent against the category's average decline of 19.09 per cent.

In the next two years, the fund delivered in line with the category average. In 2003, it managed 107.27 per cent, marginally lower than the peers' 111.56 per cent. Abundance of large-cap (an average 79 per cent) in a year dominated by mid-caps resulted in an average show.

Similar performance continued in 2004 as well. The fund survived the May mayhem quite well "� helped by a tech dominated portfolio, it lost 7.34 per cent against the category average loss of over 9 per cent.

The fund has been fully invested mostly this year. As on June 28, 2005, it is up 8.62 per cent, marginally ahead of peers' 7.18 per cent. Today, it favours technology, auto and financial sector stocks. The fund is an attractive buy for its quality orientation, a clear portfolio focus and stability of return.

"�Value Research