Franklin India Equity Hybrid Fund

The fund house that manages the Franklin India Equity Hybrid Fund is Franklin Templeton India. This is the Indian subsidiary of the global conglomerate Franklin Templeton. Franklin Templeton was started in 1947 and the group’s major focus is on investments across the world. Since then the company has grown to become one of the biggest investment houses in the world.

Today, the company employs more than 600 investment professionals and has a strong presence across 25 countries all over the world. It’s one of the largest and most visible securities global investment company.

Franklin Templeton India has been in the country for over two decades. The Indian wing of Franklin Templeton was established in 1996, as Templeton Asset Management India Private Limited. The mutual fund schemes were started way back in September 1996 and since then has grown at a steady pace over the years and today has over hundreds of thousands of individual investors in India.

Fund Information at a Glance

An investor can get the following tax benefits by investing in this fund from Franklin India:

• LTCG (Long Term Capital Gains) tax at 10%. This includes surcharges if applicable and cess. This tax gain is applicable if you hold the units for more than 12 months.
• STCG (Short Term Capital Gains) tax at 15%. This includes surcharges if applicable and cess. This tax benefit is applicable when you hold the units for lesser than 12 months.
• As an individual investor, you do not have to pay any tax on dividends that you receive from this fund. However, the DDT (Dividend Distribution Tax) is deducted at source. The DDT is charged at 11.648%, which includes 10% + 12% on surcharges along with 4% on health and education cess.

Note that: capital gains before 31st January 2018 are exempted from the LTCG tax for units acquired before 31st January 2018 and redeemed on or after 1st April 2018. The DDT is calculated by the fund house after grossing the income distributed to the investor.

Risk-o-meter

This indicates the risk level of the Franklin India Equity Hybrid Fund. The risk level is

Moderately High (which means, that the principal is at moderately high risk)

*If you are unsure if this fund is right for you, make sure to consult your financial advisor, before investing in it.

Who is this fund suitable for?

This fund is ideal for investors who are:

• Looking for multi-asset investments
• Looking to get the benefits of both equities and fixed income instruments
• Looking to build a
• Retirement corpus
• Child education corpus
• Looking for long-term wealth creation

Top 10 Holdings of the Franklin India Equity Hybrid Fund (as on 31/7/2019)

Portfolio Composition of the Franklin India Equity Hybrid Fund (as of 30/6/2019)

Sector Wise Breakdown of Equity Holdings of the Franklin India Equity Hybrid Fund (as of 31/7/2019)

*Note that portfolio holdings are subject to change.

The Franklin India Equity Hybrid fund invests in various types of instruments according to SEBI regulations. Here are some of the different types of investment products it invests in:

• Equity and equity-linked investment instruments of domestic corporations and companies.
• Securities supported, guaranteed, and issued by state governments or the central government.
• Treasury bills, zero-coupon bonds, coupon-bearing bonds.
• Securities issued by domestic government agencies, public sector undertakings, quasi-governments, and statutory bodies. The public sector undertaking may or may not be supported by state and central governments.
• Domestic non-convertible securities
• Nonconvertible portions of convertible securities like deep discount bonds, zero-coupon bonds, coupon-bearing bonds, debentures.
• Floating rate instruments like debt securities, premium notes, floating-rate instruments.
• Obligations of public sector undertakings, corporations, financial institutions, and banks
• Companies and other corporate bodies that are permitted by the RBI and SEBI.
• Domestic securitised debt, various types of securitisation like mortgage-backed securitisation and asset-backed securitisation.
• Domestic derivatives like index and stock futures.
• Domestic derivatives like imperfect hedging, interest rate swaps, interest rate futures, and other derivative instruments permitted by the SEBI.
• Certificate of Deposits (CD), Domestic Commercial Paper (CP), Repo, Reverse Repo, TREPs, Treasury Bills, Bills Rediscounting, and other money market instruments permitted by the RBI and SEBI.
• Deposits with domestic banks and other corporate bodies as permitted by SEBI.
• InvITs (Infrastructure Investment Trusts) and REITs (Real Estate Investment Trusts)
• Any other domestic money market and debt instruments
• Repo of corporate debt securities

The securities mentioned above may be listed, unlisted, privately placed, publicly offered, rated, unrated, secured or unsecured. These investment instruments can be obtained via IPOs (initial public offerings), private placements, and secondary market operations or negotiated deals. The fund manager and team can enter into repurchase or reverse repurchase obligations for all securities held by it, as long as it meets the transaction guidelines and regulations stipulated by the SEBI.

Fund Performance

*However note that past performance is not an accurate predictor of future performance.

Plan Options

The Franklin India Equity Hybrid Fund offers the following choice of plans:

• Growth plan
• Dividend plan (Reinvestment and Payout Option)
• Direct – Growth Plan
• Direct – Dividend Plan (Reinvestment and Payout Option)

*For the sake of clarity of investors, the growth plan is referred to as regular growth plan and the dividend plan is referred to as regular dividend plan.

Let’s take a closer look at each of these plans:

• Growth plan (Regular Growth Plan) and Direct Growth Plan

In this plan, the returns from the scheme are made available to investors in the form of capital appreciation. There is no dividend distributed/declared under this plan. Instead, the growth in NAV (Net Asset Value) is included directly in the value of the investment.

• Dividend plan and Direct – Dividend Plan

In this plan, the returns from the scheme are distributed among investors in the form of dividends. The trustee/AMC may approve the distribution of dividends. It’s subject to their discretion.

Investors have two options:

1. Reinvest the distributed dividend into the plan (dividend reinvestment)

2. Receive cash payouts for distributed dividends (dividend payout)

The following entities can purchase scheme units under this plan:

• Adult individuals residing in India – can purchase either singly or jointly (if purchasing jointly the number of people should not exceed three)
• Parents or guardians on behalf of minors
• Domestic corporate bodies, companies and public sector undertakings that are registered in India
• Authorized trusts, charities and religious trusts
• Investment institutions, banks, and other financial institutions
• NRIs (Non-Resident Indians), OCI (Overseas Citizen of India) and PIO (Persons of Indian Origin)
• Foreign portfolio investors, foreign institutional investors (based on RBI approval)
• Endowments, societies, co-operative societies, Wakf boards, authorized clubs, and trusts
• Sole proprietorship, LLPs (Limited Liability Partnerships), Partnership firms
• Army, navy, air force, paramilitary funds, and other eligible bodies
• Industrial or scientific research organisations
• Mutual fund schemes

FAQs on Franklin India Equity Hybrid Fund

1. What is the ideal investment horizon for investors investing in this fund?

While you can invest in this fund for short durations, it’s highly recommended that you stay invested in this fund for five years or more, to get the maximum returns.

2. What is the minimum investment value of this fund?

Initially, investors have to invest a minimum of Rs. 5000 to get started in this fund. Additional investments hereafter can be minimum Rs. 1000 or increasing in multiples of Rs. 1 over Rs. 1000.

3. What is the investment strategy of the Franklin India Equity Hybrid Fund?

The fund follows a mix of growth and value style of investing. The fund chooses a bottom-up approach for stock picking and picks companies from across various sectors. The equity portion of the fund invests in a well-diversified curated portfolio of handpicked stocks. The debt portion of the scheme invests in stable fixed-income instruments.

4. Does the fund offer guaranteed returns?

No. Just like all other mutual fund investments, there are no guaranteed returns, and the fund value is dependent on market conditions.

5. How to apply for the Franklin India Equity Hybrid Fund?

Investors who want to purchase units of this scheme have to complete the application form (which is available online on Franklin India’s site) and submit the filled-in form to the nearest collection centre or investor service centre. You have to provide the required KYC documents while submitting the application form.

If you already have completed KYC with Franklin India, you can purchase units of this scheme directly from the website, or by using the Franklin India mobile app.

*Disclaimer: Mutual fund investments are subject to market risks. Make sure to read the scheme document carefully and make the right investments. If you have any further doubts, get in touch with Franklin India’s customer support wing by dialling – 1800 425 4255, 8.a.m to 9.p.m on all days, except Sundays.