Franklin India Feeder Franklin Us Opportunities Fund

The fund house that manages the Franklin India Feeder – Franklin US Opportunities 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.

Investment Objective

The Franklin India Feeder Franklin U.S. Opportunities Fund aims to provide capital appreciation for investor’s money. It does this by investing predominately in units of Franklin U.S. Opportunities Fund, an overseas Franklin Templeton mutual fund that mainly invests in equities in the United States of America.

Indian investors invest in INR (Indian rupees) in the Franklin India Feeder Franklin U.S. Opportunities Fund. The fund manager and team invest in US dollars in the Franklin U.S. Opportunities Fund. This fund house then invests in US dollars in the equities of US-based companies.

As you can see, your Indian rupees are invested in the equities of US-based companies. The fund house handles all the foreign exchange and investments on your behalf.

What are the tax benefits of investing in the Franklin India Feeder – Franklin US Opportunities Fund?

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

• LTCG (Long Term Capital Gains) tax at 20%. This includes surcharges if applicable and cess. This tax gain is applicable if you hold the units for more than 36 months.
• STCG (Short Term Capital Gains) tax at your income tax slab rate. This includes surcharges if applicable and cess. This tax benefit is applicable when you hold the units for lesser than 36 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 29.12%, which includes 25% + 12% on surcharges along with 4% on health and education cess for individual investors. For all other investors, DDT is charged at 34.944%, which includes 30% + 12% on surcharges along with 4% on health and education cess.

Note that: The DDT is calculated by the fund house after grossing the income distributed to the investor.

Risk-o-meter

This indicates the risk levels of the Franklin India Feeder Franklin U.S. Opportunities Fund.

The risk level is high (which means that the principal invested is at 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?

It’s an ideal alternative to directly investing in US companies. This fund is ideal for investors who are:

• Looking to diversify their investment portfolio
• Looking to gain from capital appreciation in the US
• Looking to build a Retirement corpus
• Looking for long-term wealth creation

Ideal Investment Horizon

The ideal investment horizon for the Franklin India Feeder Franklin U.S. Opportunities Fund is five years or more.

The Franklin India Feeder Franklin U.S. Opportunities Fund offers annualized returns of 16.32% since inception. (This number is based on data supplied on 31/5/2019). The fund currently has over 12,500 unique investors (as on 31/6/2019).

Let’s take a look at the fund’s performance if you have invested Rs.10,000 every month under the Regular Plan via SIP.

*Note that portfolio holdings are subject to change.

Plan Options

The Franklin India Feeder Franklin U.S. Opportunities 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)

*Note that:

• All plans have a common portfolio.
• The face value of the units in all plans is Rs. 10 each.
• Investors must indicate clearly the type of plan and option while filling out the fund application form.
• If the investor has not mentioned it explicitly, the default choices will be chosen. If the investor chooses the Default Plan, then the default choice is the Direct Plan. If the investor opts for Growth plan, the default choice is Growth Plan. If the dividend option is chosen, the default choice is Dividend Reinvestment.
• If the investor has chosen Dividend Payout Option, if the amount of dividend payable is Rs.20 or less, then the dividend won’t be paid out, but will be reinvested in the scheme.

For fresh purchase, the minimum amount is Rs. 5000. For additional purchase is Rs. 1000. In SIP, the minimum amount for investment is Rs. 500. For redemption, the minimum amount is Rs. 1000 or all units if the balance is lesser than Rs. 1000.

For subscription, SIP, and redemption – the amount above the minimum amounts specified can be in any multiples of Rs. 1.

About Franklin U.S. Opportunities Fund

The Franklin U.S. Opportunities Fund is an international Franklin Templeton Fund that was launched in April 2000. It is one of the funds under the Franklin Templeton Investment Funds that is registered in Luxembourg. It qualifies as an UCITS (Undertaking for Collective Investment in Transferable Securities) under the European Council Directive.

Investment Objectives:

The investment objective of Franklin U.S. Opportunities Fund is capital appreciation for all investors. The fund invests in the equities of handpicked US-based companies that demonstrate growth, increasing profitability and growth potential.

Investment Style:

The fund follows a bottom-up approach to equity selection and a growth style of investing.

Base Currency:

The fund invests in U.S. Dollars.

Portfolio Composition (as on 31st May 2019)

Industry Exposure (as on 31st May 2019)

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. Is this a regular mutual fund?

The Franklin India Feeder Franklin US Opportunities Fund is a FOF (Fund of Funds). This means, it is a mutual fund that invests in other mutual funds. In this case, it invests in the Franklin U.S. Opportunities fund.

For investors, there is no difference in the investment mode. You invest as usual via SIP and your fund house handles the rest for you.

3. 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.

4. How to apply for the Franklin India Feeder Franklin US Opportunities 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.

5. What is the asset allocation pattern?

Under normal market circumstances, the Franklin India Feeder Franklin US Opportunities Fund would follow the following asset allocation pattern.

*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.