Franklin India Focused Equity Fund Review: A steady multi cap performer

Last Updated on

This is a performance review of Franklin India Focused Equity Fund a focused multicap fund that invests in high growth stocks. It was earlier known as Franklin India High Growth Companies Fund. After the SEBI categorization rules, it became a focused fund that can invest in a maximum of 30 stocks in the multi-cap space.

Launched in July 2007, it is the second popular Franklin equity fund with an AUM of ~ 8200 Crores, after Franklin India Equity Fund. Read its review here. You can also access the full archive of fund reviews or watch the YouTube Playlist. Also, check out yesterdays video below. I have weekly Q & A video, you can post questions on portfolio management as a comment to this video.

Do not make these 15 investing mistakes!!

According to its scheme document,  Franklin India Focused Equity Fund invests predominantly in Indian companies/sectors with above-average growth rates. Growth measures like  Enterprise Value/EBITDA/growth rate, price/earnings/growth, forward price/sales, and discounted EPS will be used for stock selection from the NSE 500 universe. It will also combine stock-first (bottom-up) and industry-first (top-down) styles with the freedom to move across market caps.

Franklin India Focused Equity Fund Review A steady multi cap performer

Franklin India Focused Equity Fund vs Peers

Using the May 2019 Freefincal Mutual Fund Screener, out of the 42 multicap funds, only 16 have outperformed Nifty LargeMidcap 250 at least 70% of every possible five year period considered (which is why that index assumes importance, click to find out how to invest in it). Franklin India Focused Equity Fund is among this 15. Fourteen out of these 15 also have fallen lower than the index with 70% consistency.

Add similar filters over every possible four years and the number becomes 11. Franklin Focused is still in. Its performance over 3,2 and 1 year periods have been about 50% only. The award for the most consistent funds in this space would go to these three (one will become large cap and the other has a bit too much AUM)

Please note that downside protection cannot be expected from a focused fund. The downside performance mentioned above is for when it was a diversified fund.

Franklin India Focused Equity Fund: Rolling returns and risk

The AMC suggests that the fund be used for needs five years and above. For these durations, the fund does have a pretty good record as we shall see below. As usual, we look at the rolling returns and rolling risk of the fund. That is we shall compare the fund vs indices (see below) over every possible 3,5,7 year periods. We shall also compare how much the monthly returns fluctuate over the same periods (rolling standard deviation). Readers interested in generating such graphs for funds of their choice can this free tool: Use this tool to compare rolling return & risk of a mutual fund with its benchmark

Three-year rolling returns

Franklin India Focused Equity Fund 3 year rolling returnClearly, you can see a slip in recent performance but that has occurred in the past and is not new for this fund.

Three-year rolling risk

Franklin India Focused Equity Fund 3 year rolling riskAs a focused fund, its risk will be comparable or even a touch higher than the index.

Five-year rolling returns

Franklin India Focused Equity Fund 5 year rolling return

Five-year rolling risk

Franklin India Focused Equity Fund 5 year rolling risk

Seven-year rolling returns

Franklin India Focused Equity Fund 7 year rolling return

Seven-year rolling risk

Franklin India Focused Equity Fund 7 year rolling riskOver 5, 7 and 10 years (not shown), the fund has displayed fantastic consistency.

Summary: Should I invest?

Franklin India Focused Equity Fund is a good pick if

  • your portfolio has an actual need for it. Meaning, you do not have any other equity fund!
  • you are willing to wait at least 5Y for the fund to deliver (your needs must well beyond that!)
  • you understand the risk associated with a focused fund: only 30 stocks and volatility will be high, downside protection cannot be expected.
Do share if you found this useful

Create a "from start to finish" financial plan with this unique open-source robo advisory software template


 Don't like ads but want to support the site? Subscribe to the ad-free newsletter! 
You will get the full post-ad-free delivered to your inbox for Rs. 3000 a year. Follow this link to read the terms and sign up! 


About the Author M Pattabiraman author of freefincal.comM. Pattabiraman is the co-author of two books: You can be rich too with goal based investing and Gamechanger. “Pattu” as he is popularly known, publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis, including a robo advisory template for use by beginners. Contact information: freefincal {at} Gmail {dot} com He conducts free money management sessions for corporates (see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints.

Content Policy

Freefincal has original unbiased, conflict-of-interest-free,  topical reports, reviews, commentary and analysis on all aspects of personal finance like mutual funds, stocks, insurance etc. All guest authors and contributors to the site also do not have any conflict of interest. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. No promotional content We do not accept sponsored posts and link exchange requests from content writers and agencies. This is our privacy policy Our website is non-profit in nature. The revenue from the advertisement will only be used for hosting charges, domain registration charges, specific plugins necessary for traffic growth and analytics services for search engine optimisation.
Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media


Do check out my books


You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingMy first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.  It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantGamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

Leave a Reply

Your email address will not be published. Required fields are marked *