Franklin India Bluechip: Lagging behind the index in short termFranklin India Bluechip, launched in 1993, has seen a lacklustre performance. Its one year return is just 7.6% compared to 12.5% for its benchmark, the Nifty 100 TRI (Total Returns Index). Its three year returns also lag the benchmark at 9.9% compared to 11.3%. Large-cap funds as a whole are struggling to beat their benchmarks but Franklin’s numbers are showing a more sustained level of underperformance.

The fund has an AUM of Rs 8,099 crore. Anand Radhakrishnan has been at its helm since April 2007. Roshi Jain and Srikesh Nair were appointed fund managers alongside him in May 2016.

What’s happening with the fund

As you can see, the longer-term performance of Franklin India Bluechip is rock-solid. It has done well against its benchmark over the past five and ten years. However, there is a slowdown in the fund over more recent time-periods.  It is now just a three-star fund on Value Research.

Product One Year Three Years Five Years 10 Years Since Inception
Fund 7.6% 9.9% 14.8% 12.4% 21.05%
Benchmark 12.5% 11.3% 14.2% 9.9%

Source: Value Research, Figures as on 16/06/2018

Portfolio

Franklin India Bluechip is a large-cap fund. It is fairly concentrated with the top 10 stocks accounting for 47% of the portfolio. HDFC Bank accounts for 10.3% of its assets followed by Infosys (6.08%) and L&T (4.87%). The fund, like its peers, is dominated by financials (29%) followed by technology (10.72%) and automobiles (10.41%).

However, it has given higher weightage to telecom and healthcare stocks than its benchmark. Bharti Airtel is its fourth largest holding.

RupeeIQ Take

A performance deterioration on a 1-3 year basis is a warning sign, but not conclusive about the fund’s future trajectory. Franklin has an impressive longer-term history and the fund may well catch up and revert to historical performance. However, investors with fresh money can look towards other large-cap funds until signs of a recovery are evident.

Author
Neil Borate

Neil Borate is Deputy Editor, RupeeIQ. He can be contacted at neil@rupeeiq.com.