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Franklin Templeton India launches new European growth fund

Franklin Templeton Investments India, one of India's largest Asset Management Company (AMC) managing Rs 45,000 crore has recently launched the Franklin India Feeder - Franklin European Growth Fund. The fund will invest into the Luxembourg-domiciled Franklin European Growth Fund (underlying fund), an overseas equity fund launched in December 2000, which primarily invests in companies across market caps that have their principal business in European Countries.
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.

VIJAY KR YADAV
PGDM SEM-2
SOU- TIMES OF INDIA