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Has the Franklin India Growth Fund Outperformed Its Benchmark?

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Introduction 

The Franklin India Growth Fund (FIGZX) invests with the aim of long-term capital appreciation. In terms of market capitalization, the fund invests across market caps. As of September 30, 2015, the fund had a diversified portfolio with investments in nine different sectors. It did not have any investments in the utilities sector. The chart below shows the sector breakdown of the fund’s assets.

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Top holdings of FIGZX

As of September 30, 2015, the top ten holdings of FIGZX formed 40.3% of the portfolio. The total number of holdings of the FIGZX is 52. Financials formed 28.1% of the portfolio. The top ten holdings of the fund are skewed towards financial stocks. Financials form 18.9% of the fund’s top ten holdings. Among non-financial stocks, Infosys (INFY) is a major holding. INFY is the second largest holding, forming about 5.5% of the portfolio. The HDFC Bank (HDB) is the top holding. HDB forms 5.5% of the portfolio. Tata Motors (TTM) is also among the top ten holdings.

Returns analysis

As of September 30, 2015, the FIGZX has given a return of 4.2% over a period of one year. The MSCI India Index is its benchmark index. The fund has outperformed the benchmark index for the one-year period, as the benchmark index has given a return of 0.01%.

The fund’s inception date was January 31, 2008. The average annual return of the fund since inception is 3.5%. The chart above shows the annual returns of FIGZX and the MSCI India Index for the last seven years. From the chart above, we can conclude that the results were mixed, and the fund has not outperformed the benchmark on a consistent basis. 2009 was when the fund posted its best performance with returns 82.1%. The Matthews India Fund (MINDX) was a consistent outperformer.

In the next article, we will compare and analyze the returns of the five India-focused funds over the last six years.

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