`

Study of

Submitted to

Prof. Neeraj Amarnani

In partial fulfillment of the requirements of the Thesis

Investment & Portfolio Management

On 06/08/2012 By Pankil Dalal (102131) Niraj Turakhia (102129) Sachin Patel (102139) Rushi Shah (102138)
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Index
Sr. No.
1 2 3 4 5 6 Introduction Franklin India Index Fund - Growth Templeton India Short Term Income Plan Franklin India Blue chip Fund Growth FT India Monthly Income Plan - Growth References

Particular

Page No.
3 4 9 14 18 21

Introduction

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Franklin Resources, Inc. is a global investment management organisation known as Franklin Templeton Investments. Their headquarters are located just south of San Francisco, in San Mateo, California. They have offices in 29 countries around the world. Vision of the Company To be the premier global investment management organization by offering high quality investment solutions, providing outstanding service and attracting, motivating and retaining talented individuals. As a group we are taking four mutual fund scheme of the company for analysis
1. Franklin India Index Fund - Growth 2. Templeton India Short Term Income Plan 3. Franklin India Blue chip Fund Growth 4. FT India Monthly Income Plan - Growth

Franklin India Index Fund - Growth

Investment Objective Page 3 of 20

An open end index linked growth scheme with the objective to invest in companies whose securities are included in the Nifty and subject to tracking errors, endeavouring to attain results commensurate with S&P CNX Nifty Index under NSE Nifty Plan, and to provide returns that, before expenses, closely correspond to the total return of common stocks as represented by the BSE Sensex under BSE Sensex Plan. Portfolio Composition

Equity

Sector

Qty

Value (Rs cr) 21.25 19.22 18.64 15.94 15.5 13.62 11.5 9.99 8.58 7.26 6.45 6.28 5.67 4.9 4.34 4.03 3.69

Percentage of Holding (%) 8.39 7.59 7.36 6.29 6.12 5.37 4.54 3.94 3.39 2.87 2.55 2.48 2.24 1.93 1.71 1.59 1.46

ITC Reliance Infosys ICICI Bank HDFC Bank HDFC Larsen TCS SBI HUL ONGC Tata Motors BhartiAirtel Mah and Mah Tata Steel Axis Bank Sun Pharma

Tobacco Oil & Gas Information Technology Banking & Financial Services Banking & Financial Services Banking & Financial Services Engineering & Capital Goods Information Technology Banking & Financial Services Consumer Nondurables Oil & Gas Automotive Telecommunication Automotive Metals & Mining Banking & Financial Services Pharmaceuticals

8,20,599.00 2,60,429.00 74,269.00 1,77,217.00 2,75,060.00 2,08,442.00 82,288.00 78,195.00 39,742.00 1,59,794.00 2,26,557.00 2,59,213.00 1,86,035.00 69,279.00 98,367.00 39,691.00 57,988.00

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Coal India Kotak Mahindra Bajaj Auto Hero Motocorp NTPC Wipro Dr Reddys Labs BHEL Jindal Steel Tata Power Asian Paints Grasim Cipla Power Grid Corp GAIL SterliteInd IDFC Maruti Suzuki Hindalco Ambuja Cements Bank of Baroda Cairn India ACC HCL Tech PNB BPCL Siemens JaiprakashAsso Reliance Infra Ranbaxy Labs Sesa Goa

Metals & Mining Banking & Financial Services Automotive Automotive Utilities Information Technology Pharmaceuticals Engineering & Capital Goods Metals & Mining Utilities Chemicals Conglomerates Pharmaceuticals Utilities Oil & Gas Metals & Mining Banking & Financial Services Automotive Metals & Mining Cement Banking & Financial Services Oil & Gas Cement & Construction Information Technology Banking & Financial Services Oil & Gas Engineering & Capital Goods Cement & Construction Utilities Pharmaceuticals Metals & Mining

96,254.00 55,466.00 20,789.00 14,757.00 1,96,680.00 78,225.00 18,914.00 1,21,841.00 59,820.00 2,49,502.00 6,659.00 9,594.00 78,178.00 2,17,687.00 69,088.00 2,30,738.00 1,74,732.00 20,379.00 1,99,599.00 1,21,937.00 27,146.00 61,369.00 15,014.00 37,223.00 20,459.00 20,017.00 18,259.00 1,76,261.00 21,270.00 23,376.00 59,180.00

3.34 3.29 3.27 3.17 3.14 3.13 3.12 2.83 2.81 2.61 2.59 2.53 2.47 2.47 2.43 2.37 2.38 2.38 2.39 2.12 1.99 1.89 1.9 1.77 1.65 1.49 1.34 1.3 1.19 1.15 1.13

1.32 1.3 1.29 1.25 1.24 1.23 1.23 1.12 1.11 1.03 1.02 1 0.98 0.98 0.96 0.94 0.94 0.94 0.94 0.84 0.79 0.75 0.75 0.7 0.65 0.59 0.53 0.51 0.47 0.45 0.45

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DLF SAIL Cash / Call Call,cash and other current asset (Source: Money Control)

Retail & Real Estate Metals & Mining Rating -

55,998.00 90,333.00 Value 2.88

1.11 0.82 % 1.1

0.44 0.32

Asset Allocation Class Equity Cash/ Call Percentage (%) 98.94 1.06

Return over different time horizons Period Fund Return Category Return 1 Week 1 Month 3 Month 1 Year 2 Year 3 Year 5 Year 02.22 -1.28 1.25 -3.43 -1.98 3.53 3.23 02.12 -1.01 1.18 -2.98 -1.57 4.34 3.29 02.13 -1.31 0.27 -4.14 -2.56 2.60 2.58 Sensex S & P CNX Nifty 02.27 -1.37 0.53 -3.50 -2.08 3.44 3.45

(Source: Value Research) Quarterly Returns

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Year 2012 2011 2010 2009 2008 2007 14.02 -5.12 0.70 2.07 -23.16 -3.43

Q1 0.19 -2.75 1.66 41.72 -14.59 12.91

Q2 -12.21 13.56 18.73 -2.73 16.23

Q3 -6.67 1.48 2.09 -24.91 21.51

Q4

(Source: Value Research) Best and Worst Performance Best Performance

Month 30.92%

Worst Performance Month -37.40 (24/09/200824/10/2008) Quarter -41.21 (02/09/200803/12/2008) Year -55.99 (14/01/200813/01/2009)

(11/05/200910/06/2009)

Quarter

80.21%

(09/03/200910/06/2009)

Year

100.85%

(24/04/200323/04/2004)

(Source: Value Research)

Group Opinion If you are new to equities or equity mutual funds, an index fund may just be what you are looking for. As these funds have a lower risk-return profile compared to actively managed funds, these funds will rise and fall less than other equity funds. As we can see, as index moves upward, the performance of this fund also moves upward, thus, it is directly proportionate to the Index. If one estimates that Index will move upward in Long time period, one should dont hesitate to invest in this fund. The return on this fund will be similar to that of the Index.

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Templeton India Short Term Income Plan

Investment Objective Open-end income scheme with an objective to provide stable returns by investing in fixed income securities. Portfolio Composition Company Name Rating Market Value (Rs. Lakhs) Magma Fincorp Ltd. Fullerton India Credit Company Ltd Lands End Properties Limited Mahindra Vehicle Manufacturers Limited ECL Finance Ltd JM Financial Products Ltd INDIGOLD TRADE AND SERVICES LIMITED PCR INVESTMENTS LTD Reliance Capital Ltd. Cholamandalam Investment & Fin. Co. Ltd SRF LTD ICRA AA+(SO) BW AA-(SO) CARE AAA ICRA AA FITCH AA 12542.6 10086.25 9267.68 7530.59 7514.5 2.28 1.84 1.69 1.37 1.37 CARE AA+ ICRA AA+ CARE AA+(SO) ICRA AA CRISIL AACRISIL AA27583.12 25262.41 19121.6 14628.23 13900.64 12544.44 5.02 4.6 3.48 2.66 2.53 2.28 % of Assets

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Infiniti Retail Limited Grand View Estates Private Ltd. DHFL Holdings Private Limited Indostar Capital Finance Pvt Ltd Essel Corporate Resources Pvt Ltd Tata Motors Ltd. LIC Housing Finance Total Corporate Debt

CARE A+ ICRA AA+(SO) CARE A1+(SO) CARE AABW A-(SO) CRISIL AAA(SO) CRISIL AAA

6508.18 5609.54 5192.34 5087.15 5016.38 3606.21 497.77 191499.63

1.18 1.02 0.95 0.93 0.91 0.66 0.09 34.86

ILSS 1 TRUST 2012 ILSS 4 Trust 2011 ILSS 3 Trust 2011 ILSS 5 Trust 2011 ILSS 5 Trust 2010 LST WITEC Sr 20 PTC Total Pool PTC

FITCH AAA(SO) ICRA AAA(SO) ICRA AAA(SO) ICRA AAA(SO) ICRA AAA(SO) CRISIL AAA(SO)

12846.78 2232.02 2108.83 1671.65 1455.96 713.57 21028.81

2.34 0.41 0.38 0.3 0.27 0.13 3.83

Tata Teleservices Limited Pipeline Infrastructure (India) Private Limited Tata Teleservices Limited

CARE A+(SO)

10106.16

1.84

CRISIL AAA(SO) CARE A+(SO)

6837.41 6063.7

1.24 1.1

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North Delhi Power Limited North Delhi Power Limited Pipeline Infrastructure (India) Private Limited Power Grid Corporation of India Total Single Loan PTC

ICRA AAICRA AACRISIL AAA(SO) CRISIL AAA(SO)

1994.54 1199.41 1046 851.96 28099.17

0.36 0.22 0.19 0.16 5.11

NABARD Total PSU/PFI Bonds

CRISIL AAA

998.82 998.82

0.18 0.18

Reliance Infrastructure Ltd. Reliance Capital Ltd. Oriental Bank of Commerce Andhra Bank Canara Bank Punjab National Bank HDFC Bank ICICI Bank Ltd. State Bank of Patiala State Bank of Bikaner and Jaipur Axis Bank Corporation Bank State Bank of Hyderabad Bank of India Central Bank of India United Bank of India

FITCH A1+ ICRA A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ ICRA A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+ CRISIL A1+

36746.76 31638.88 27091.13 26783.55 26761.25 25783.34 20595.22 18736.8 15823.52 10822.47 9427.35 9409.55 7070.25 6135.6 4724.03 4707.78

6.69 5.76 4.93 4.88 4.87 4.69 3.75 3.41 2.88 1.97 1.72 1.71 1.29 1.12 0.86 0.86

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IDBI Bank Shapoorji Pallonji & Co Ltd. Indian Overseas Bank SYNDICATE BANK Vijaya Bank Ltd. TATA Realty & Infrastructure Ltd Total Money Market Instruments Call, Cash & Other Current Assets Net Assets (Source: Franklin Templeton)

CRISIL A1+ ICRA A1+ CRISIL A1+ CRISIL A1+ CARE A1+ CARE A1+

4682.7 3477.33 2374.37 2366.06 2339.78 2295.81 299793.5 7958.99 549378.92

0.85 0.63 0.43 0.43 0.43 0.42 54.57 1.45 100

Return over different time horizons Period Annualised Returns (%) 1 week 1 month 3 months 6 months 1 year 2 years 3 years 5 years NA NA NA NA 9.6 8.4 8 9 Absolute Returns (%) 0.1 0.9 2.5 4.8 9.6 17.5 26.1 54.1

(Source: Money Control) NAV Performance Graph

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(Source: Money Control) Group Opinion Templeton Short term Income Plan(TSTIP) as the name and the objective suggest the portfolio this mutual fund has been designed so as to provide stable income by investing mainly into fixed securities. The portfolio consist of mainly of A+ companies. The composition of assets largely consist of money market instruments which is nearly more than 50% of the overall portfolio other include coporate debt which around 30% while rest includes single loan pass through cerificates(PTC),pool PTC , call cash and assets and PSU/PFI bonds. With an annual return of around 8 percent and plus for around five years the fund seems to performing well taking into consideration the market scenario of last five years. Even though short-term interest rates have declined over the last three months, the fund may deliver good returns as it holds a portfolio with yield to maturity. The fund is suitable for investors who have high surplus but require money over the short to medium term. However since the its an short term investment scheme that yields regular income the returns is around 8% annualized which is slightly higher than the fixed deposits in bank considering it to be risk free, therefore one might consider it to be a riskier scheme looking at the returns. But Funds sharp ratio of 1.63 (assuming 7 per cent as the risk free rate) suggests that it has consistently delivered good returns over the long term adjusted for risks. This indicates that the fund delivered positive returns over a long term without taking excessive risk.

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As mentioned above around 30 per cent of the portfolio was invested in slightly longer term instruments such as corporate bonds and pass-through certificates therefore if interest rates do fall steeply, the prices of these long-term bonds will rise if the rates are cut thereby offsetting the impact of decline in short-term rates.

Franklin India Blue chip Fund - Growth

Investment Objective Open-end growth scheme with an objective primarily to provide medium to long-term capital appreciation. Portfolio Composition % of Assets 2.06 1.99 0.96 7.47 5.03 2.82 2.8 2.45 1.16 1.15 0.99 4.24 0.89 1.58

Company Auto Bajaj Auto Ltd. Mahindra & Mahindra Ltd. Maruti Suzuki India Ltd. Banks ICICI Bank Ltd. HDFC Bank Ltd. Kotak Mahindra Bank Ltd. IndusInd Bank Ltd. Axis Bank Ltd. Yes Bank Ltd. State Bank of India Union Bank of India Ltd. Cement Grasim Industries Ltd. India Cements Ltd. Construction Project Larsen & Toubro Ltd. Consumer Non Durables GlaxoSmithkline Consumer Healthcare Ltd.

shares 640000 1375000 400000 4050000 4350000 2323160 4000000 1173768 1662080 260000 2300004 780000 4989124 550000

Rs. Lakhs 10060.8 9719.88 4679 36433.8 24512.25 13758.92 13642 11923.14 5636.94 5613.79 4807.01 20649.33 4328.07 7685.43

260000

7107.23

1.46

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Dabur India Ltd. 5500000 Asian Paints Ltd. 150000 Titan Industries Ltd. 1000000 Ferrous Metals Steel Authority of India Ltd. 6000000 Finance Housing Development Finance Corp. Ltd. 1440 Gas GAIL India Ltd. 2550000 Industrial Capital Goods Bharat Electronics Ltd. 644103 Crompton Greaves Ltd. 5000000 Industrial Products Cummins India Ltd. 2300000 Coal India Ltd. 2800000 NMDC Ltd. 3200000 Non - Ferrous Metals Hindalco Industries Ltd. 6700000 Oil Oil & Natural Gas Corp. Ltd. 5500000 Petroleum Products Reliance Industries Ltd. 2500000 Indian Oil Corp. Ltd. 2700000 Pharmaceuticals Dr. Reddy's Laboratories Ltd 850000 Cadila Healthcare Ltd. 1280000 Cipla Ltd. 2700000 Glaxosmithkline Pharmaceuticals Ltd. 300000 Power Power Grid Corp. of India Ltd. 12800000 NTPC Ltd. 6300000 NHPC Ltd. 36000000 Torrent Power Ltd. 2000000 Software Infosys Ltd Oracle Financial Services Software Ltd. Telecom - Services

6272.75 5822.78 2223

1.29 1.19 0.46

5436

1.11

9.42 8967.08 8628.73 6060 10474.2 9727.2 5960 8033.3

0 1.84 1.77 1.24 2.15 2 1.22 1.65

15658.5 18436.25 6910.65

3.21 3.78 1.42

14018.63 9845.76 8542.8 6047.1

2.88 2.02 1.75 1.24

14521.6 10064.25 6570 3657

2.98 2.06 1.35 0.75

1370000 265000

34284.94 6761.74

7.03 1.39

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Bharti Airtel Ltd Idea Cellular Ltd.

10700000 11376675

32635 8629.21 Market Value (` in Lakhs) 104.58 454755.44 104.58 32717.45 487577.47

6.69 1.77

Debt Holdings Dr Reddy's Laboratories Total Equity Holding Total Debt Holding Call,cash and other current asset TotalAsset (Source: Franklin Templeton)

Rating ICRA AA+

% of Assets 0.02 93.27 0.02 6.71 100

Return over different time horizons Absolute Period Returns (%) 1 week 0.7 1 month -1.1 3 months 3.8 6 months -1.5 1 year 0.9 2 years 2.5 3 years 29.6 5 years 43.9 (Source: Money Control) Annualised Returns (%) NA NA NA NA 0.9 1.2 9 7.6

NAV Performance Graph

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(Source: Money Control) Group Opinion Basically Franklin India blue chip fund (G) is one of the best funds amongst the categories in Franklin temptation growth schemes. The scheme is ranked 2nd in large capital category by crisil. And In this scheme investors funds are allocating into the equity market especially in to those stocks which have the high weightage in index. So Franklin blue chip is an equity fund scheme or we call that it is an open ended growth scheme with primarily objective is to provide medium to long term capital appreciation in investment. So investors will get more benefits in long run. In Franklin blue chip scheme Fund manager is making investments in to the blue chip stocks which we call it large cap stock or frontline stocks. It has fund size of 4875.75crores with 36.55% of portfolio turnover. Basically we are having the two charts for analysis like one is the assets allocation chart or another one is on periodic returns of the NAV. So as per the sectorial allocation chart it has clearly shown that company has diversified portfolio with different sectorial investment such as banking, IT, chemical &cement, oil &gas, metals, CD, pharma etc and out of total holdings. Majority of the assets are invested into the banking, oil & gas, telecommunication and IT sectors. Or others so we can get the benefits of the different sectorial performance And if we see the last five years of its performance as per the graph we found that on aug 2008 its NAV price was 139.771 than it decreases to 91.996 in 2009 because of there was big fall in the market during 2008 to 09 .but after that it performed very well. Like we have seen from 2009 to 2012 price of the NAV is increased steadily. In 2010 it was working at around 188 rs or 218.86 in 2011 and in around feb 2012 it reached at the level of 220 .551

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and currently it is trading on 210 .492 level so here we observed that there are very attractive rate of the returns on this fund. So comparatively risk of the investment in this fund is low because risk is divided between the different stocks because of its diversified portfolio so adversely movement of the one stock will not be affected to the investors. One of the benefit of the large cap stock that it recovers very fast with the pace of market movement for example if sensex goes down of 500 points than it reduces in big gap and if market recovers from that level than it will react very fast and u can find that it recovers double than the falling in most of the time. So it moves parallel with the index movement. These stocks have the capacity to change the whole market as well. So we would suggest that if u are already invested than you may continue to stay invested but do keep check on the investment. Because overall its given 60% returns of last five years and comparing from 2009 to 12 it gives 142% of returns of last 4 years.

FT India Monthly Income Plan - Growth

Investment Objective An open end income fund which seeks to provide regular income through a portfolio of predominantly high quality fixed income securities with a maximum exposure of 20% to equities. Portfolio Composition Equity Sector Banking & Financial Services Telecommunication Information Technology Banking & Financial Services Oil & Gas Conglomerates Banking & Financial Services Banking & Financial Qty Value (Rs cr) 3.97 3.68 3.6 2.88 2.54 2.51 2.43 2.39 % Of Asset 1.3 1.21 1.18 0.94 0.83 0.82 0.8 0.78

ICICI Bank Bharti Airtel Infosys HDFC Bank Reliance Grasim IndusInd Bank Kotak Mahindra

44,178.00 120,639.00 14,384.00 51,030.00 34,509.00 9,484.00 71,303.00 40,339.00

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Cummins Marico Eicher Motors Power Grid Corp ONGC Coal India Mah and Mah Axis Bank Cadila Health Ipca Labs Dr Reddys Labs Pidilite Ind Asian Paints Dabur India Oracle Financ Idea Cellular ICRA Hindalco SBI Yes Bank GlaxoSmith Con Voltas Bank of Baroda Torrent Pharma Wipro IOC Crompton Greave NTPC India Cements JagranPrakashan NHPC TV18 Broadcast GlaxoSmithKline Pfizer Guj Mineral Cipla Gujarat Pipavav SKF India

Services Engineering & Capital Goods Consumer Non-durables Automotive Utilities Oil & Gas Metals & Mining Automotive Banking & Financial Services Pharmaceuticals Pharmaceuticals Pharmaceuticals Chemicals Chemicals Consumer Non-durables Information Technology Telecommunication Miscellaneous Metals & Mining Banking & Financial Services Banking & Financial Services Food & Beverages Conglomerates Banking & Financial Services Pharmaceuticals Information Technology Oil & Gas Engineering & Capital Goods Utilities Cement & Construction Media & Entertainment Utilities Media & Entertainment Pharmaceuticals Pharmaceuticals Metals & Mining Pharmaceuticals Engineering & Capital Goods Engineering & Capital Goods

51,200.00 122,082.00 8,341.00 143,803.00 55,900.00 39,824.00 18,933.00 12,100.00 14,900.00 29,486.00 5,936.00 55,476.00 2,000.00 68,000.00 3,006.00 99,490.00 5,216.00 59,082.00 2,911.00 18,000.00 2,200.00 55,000.00 8,000.00 9,800.00 14,771.00 21,000.00 44,506.00 34,206.00 63,815.00 63,358.00 235,000.00 146,682.00 1,600.00 2,600.00 17,000.00 10,000.00 55,000.00 4,300.00

2.33 2.24 1.67 1.63 1.59 1.38 1.34 1.23 1.15 1.06 0.98 0.92 0.78 0.78 0.77 0.75 0.69 0.71 0.63 0.61 0.6 0.58 0.59 0.59 0.59 0.54 0.54 0.55 0.55 0.56 0.43 0.37 0.32 0.31 0.32 0.32 0.32 0.27

0.76 0.74 0.55 0.54 0.52 0.45 0.44 0.4 0.38 0.35 0.32 0.3 0.25 0.25 0.25 0.25 0.23 0.23 0.21 0.2 0.2 0.19 0.19 0.19 0.19 0.18 0.18 0.18 0.18 0.18 0.14 0.12 0.11 0.1 0.1 0.1 0.1 0.09

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TVS Motor Automotive Berger Paints Chemicals (Source: Money Control)

61,000.00 3,407.00

0.22 0.05

0.07 0.02

Asset Allocation Class Equity Debt Money Market Cash/Call (Source: Money Control) Percentage (%) 18.29 51.13 29.65 0.91

Return over different time horizon

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Period 1 week 1 Month 3 Months 6 Months 1 Year 2 Year 3 Year 5 Year (Source: Money Control) Group Opinion

Absolute Return 0.2 0.6 2.5 3.3 6.5 11.9 20 38.1

Annualized Return NA NA NA NA 6.5 5.8 6.3 6.7

FT India Monthly Income plan provide steady returns with limited volatility. Those Investors (Conservative Investors) who are looking for better return than bank FDs should invest in these funds. Generally, Investment horizon is for 2-3 years. This fund is also for those investors who are risk-averse and wanting to enter in to the stock market with limited exposure. The investor who wants regular income (every month) can invest in these funds because this fund provides regular payouts through dividend, almost every month.

References
http://www.moneycontrol.com http://www.franklintempletonindia.com http://valueresearchonline.com

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