Franklin Templeton India launches new European growth fund
Team Money Today
Last Updated: April 24, 2014 | 10:23 IST
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Speaking about the fund's strategy, Michael Clements, Portfolio Manager, Analyst, Franklin Templeton Investments, said, with the economic recovery gaining traction in Europe, corporate earnings are poised to show improvement.
Currently Indian investors have the choice to invest into some European Offshore funds. The DWS Top Euroland Offshore fund, for instance, has delivered 29% in the last one year, while the JP Morgan Europe Dynamic Equity Offshore Fund and Religare Invesco Pan European Equity Fund have been recently launched in January 2014.
Many European companies have a global presence and will benefit from a synchronized recovery at home and abroad. "While European equities have posted strong gains over the past year, valuations remain attractive in numerous pockets", says Clements. "We tend to be contrarian in our style, and our philosophy and process often lead us to segments of the market that are out of favour with other investors.", he adds.
The AMC already has an established record of managing international funds. It manages Rs 750 crore in its US focused fund known as the FT India Feeder Franklin US Opportunities Fund , which has returned 38% in the last one year (as on 22 April, 2014). This compares very closely to its peer, the ICICI Prudential US Bluechip Equity Fund that returned 41% and has outperformed DSP Blackrock's US Flexible Equity Fund, which returned 33% for the same period. It also manages Rs 135 crore in the Franklin Asian Equity Fund.
According to Vivek Kudva, Managing Director, India and CEEMEA, Franklin Templeton Investments, "Europe constitutes 24% of the world's GDP and several European companies have demonstrated strong competitive advantage and global presence in sectors such as engineering, pharmaceuticals and consumer goods. With 34% of the world's trade generated through Europe, this region remains one of the largest players and an excellent region to do business with."
Kudva feels that adding an international fund with exposure to European companies to the portfolio can help investors reduce the potential portfolio risk over the medium to long term.
Shares in tech heavyweights Apple and Facebook held hefty after-hours gains on Thursday as their results handily outpaced Wall Street expectations, though Asian markets managed only a mumbled cheer on the news.
South Korea's Samsung Electronics did gain 0.6 per cent but the main KOSPI index dipped a fraction. Markets were mixed across the region with Japan's Nikkei off 0.6 per cent but Singapore up 0.5 per cent.
MSCI's broadest index of Asia-Pacific shares outside Japan edged ahead by 0.1 per cent.
The outlook for the US market was brighter, however, with Nasdaq futures up 1.1 per cent and the S&P 500 E-mini adding 0.3 per cent.
Those gains came after Apple decided to buy back $30 billion of its shares through the end of 2015 and authorised a seven-for-one stock split.
Its shares jumped almost 8 per cent to $566.50 in after-hours trade, the highest since December and adding roughly $35 billion to its market worth.
Apple reported sales of 43.7 million iPhones in the quarter ended March, far outpacing forecasts. That drove a 4.6 per cent rise in revenue to $45.6 billion, a record for any non-holiday quarter.
The iPhone maker's strong performance did not translate into Asia as much as it usually does, with mixed trading seen among big tech players in Japan, South Korea and Taiwan.
also boasted a 3.7 per cent jump after hours as the Internet social networking company topped Wall Street's financial targets.
The Nasdaq had ended on Wednesday 0.83 per cent lower, while the Dow eased 0.08 per cent and the S&P 500 lost 0.22 per cent
NAGESH DUBEY
PGDM 2ND SEM
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