The Franklin Asian Equity Fund is a fund designed to capitalise on the booming Asian economy, cashing in on companies which are destined to grow stronger. This is a medium and long term fund and is suited for those who are willing to take high risks with their investments. This fund primarily deals with equities.
Type or nature of fund
Franklin Asian Equity Fund (FAEF) is an Open ended Diversified Equity fund.
Investment objective
The primary objective of Franklin Asian Equity Fund is to invest in Asian companies and sectors which have great potential across market capitalization to offer medium or long term appreciation of investments.
Fund information
| Inception date | January 16, 2008 |
| CRISIL rank | This Fund is not ranked by CRISIL |
| Schemes |
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| Entry load | Nil |
| Exit load | 1% for redemptions within 3 years of allotment |
| Minimum investment | Rs 5,000 |
| Product label – Risk and target investors | High Risk product designed for investors looking for long term capital appreciation through a fund which invests in Asian companies. |
| Benchmark |
MSCI Asia Standard Exchange (ex Japan)
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| SIP (Systematic Investment Plan) |
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| SWP (Systematic Withdrawal Plan) | Yes. Investors with a minimum account balance of Rs 25,000 can avail a monthly or quarterly payment mode, choosing between a fixed amount or capital appreciation plan. |
| STP (Systematic Transfer Plan) | Yes. Monthly or quarterly mode option available, with the condition that redeemed units need to be reinvested in another scheme. |
| Redemption | Minimum Redemption Amount – Rs 1,000. |
| Taxation (on investment and on redemption) | Investors need to consult their tax adviser to get an exact picture of the tax implications related to Franklin Asian Equity Fund. |
Fund managers
Franklin Asian Equity Fund has two fund managers, Ms Roshi Jain and Mr Neeraj Gaurh.
Ms Roshi Jain
Designation and Work- Ms Jain is the Vice President of Equity Portfolio Management at Franklin Templeton India and is the portfolio manager for other funds like Franklin Build India Fund, Franklin India Flexi Cap and Franklin India High Growth Companies Fund. She is also a co-portfolio manager for multiple funds at the organisation.
- Ms Jain has been in this industry for over a decade, having worked with Goldman Sachs, London prior to this.
- Ms Jain holds a PGDM from IIM Ahmedabad, apart from being a CFA Charterholder and and CA.
Mr. Neeraj Gaurh
Designation and Work- Mr. Neeraj Gaurh is a Vice President and Senior Research Analyst at Franklin Templeton India.
- Mr. Gaurh has close to a decade of experience in Finance, having worked with ICICI Bank and Nomura Securities before joining Franklin Templeton.
- Mr. Gaurh holds a MBA degree from IIM Kozhikode and a Bachelor of Engineering degree from Malaviya National Institute of technology, Jaipur.
Investment philosophy or strategy
Franklin Asian Equity Fund aims to take advantage of the growing Asian market by investing in companies exhibiting high growth potential across Asia (except Japan). A macro analysis of these countries and research enable it to find the right companies, with the fund applying a bottom up and top down approach. The fund hopes to reduce risk by diversifying funds across companies in different sectors.
Portfolio – Sector / Top 10 holdings
| Company | Sector | Percentage |
| Taiwan Semiconductor Manufacturing (Taiwan) | Hardware | 7.46 |
| Samsung Electronics (South Korea) | Hardware | 5.48 |
| Aia Group (Hong Kong) | Finance | 4.68 |
| China Oversea Land and Investment (Hong Kong) | Construction | 3.63 |
| Meritz Fire and Marine Insurance (South Korea) | Finance | 2.74 |
| Tencent Holdings (Hong Kong) | Software | 2.71 |
| Sun Pharmaceutical Industries Ltd | Pharmaceuticals | 2.68 |
| Ping Ah Insurance (Hong Kong) | Finance | 2.66 |
| Shinhan Financial (South Korea) | Banks | 2.6 |
| Baidu Inc (Adr) | Software | 2.51 |
Risk measures – Last three years
The risk measures for various criteria over the last three years are mentioned below.
| Sharpe ratio (Annualized) | 0.21 |
| R-squared | 0.83 |
| Beta | 0.82 |
| Standard Deviation | 2.79 |
Performance
| AUM | Rs 112.14 crores (as of July 31, 2015) |
| NAV (as of 03/09/2015) |
Dividend – 12.19 Growth – 14.53 Direct Dividend – 12.38 Direct Growth – 14.75 |
Returns
The returns provided by Franklin Asian Equity Fund in comparison to market returns are shown in the table below.
| Period | Scheme returns | MSCI Asia Standard Index (ex Japan) | S&P CNX Nifty |
| March 2012 – March 2013 | 9.98% | 11.27% | 7.31% |
| March 2013 – March 2014 | 10.60% | 10.99% | 17.98% |
| March 2014- March 2015 | 14.97% | 12.83% | 26.65% |
Expense Ratio
The Expense ratio of Franklin Asian Equity Fund is mentioned in the table below.
| Daily Net Assets | Expense ratio |
| First 100 crores | 2.92% |
| Next 300 crores | 2.67% |
| Next 300 crores | 2.42% |
| On Remaining Balance | 2.17% |
Expert view of the fund
Franklin Asian Equity Fund is a relatively new fund, having lower assets compared to other funds which have been around for 7-8 years. Its strategy to invest in Asian markets have not yielded exceptionally high results compared to its benchmark, with returns in the Indian market offering higher returns for most of this period. The returns offered might get stronger with changing market trends and it can be a decent investment option for people who know the Asian market well and are not averse to handling risk.
How to apply – online + distributors
One can invest in Franklin mutual funds either through an online medium or through authorised distributors. Individuals wishing to invest in this fund need to log on to the official website of Franklin Templeton and follow a few simple steps to register themselves. They are required to provide their PAN details, mobile number, email id and bank details to complete the online registration process.
One can also apply through registered distributors like the MF branch or banks which are authorised to conduct such transactions. All they need to do is fill in an application form and enter the relevant data about their preferred scheme and submit it to the appropriate branch.
