Franklin India Dynamic Accrual Fund or FIDA as it is called is an income fund which strives to provide regular income to investors. It aims to accomplish this by investing in corporate bonds in the country and is suitable for individuals who have a medium to long term investment period. A composite strategy is implemented by FIDA by combining accruals for high yields and duration for capital appreciation.
Type or nature of fund
Franklin India Dynamic Accrual Fund is an open ended income scheme.
Investment objective
The primary objective of Franklin India Dynamic Accrual Fund is to provide a regular income source to investors by investing in fixed income securities like corporate bonds.
Fund information
| Inception date | March 5, 1997 |
| CRISIL rank | Not ranked by CRISIL |
| Schemes |
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| Entry load | Nil |
| Exit load |
3% for redemptions within 1 year of allotment 2% for redemptions after 12 months but before 24 months from allotment date 1% for redemptions after 24 months but within 36 months from allotment date 0.50% for redemptions after 36 months but before 48 months from allotment date |
| Minimum investment | Rs 10,000 |
| Product label – Risk and target investors | Moderate Risk product designed for investors looking for medium term capital appreciation with their current source of income through investments in fixed income securities with high potential for capital gain. |
| Benchmark |
CRISIL Composite Bond Fund Index
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| SIP (Systematic Investment Plan) |
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| SWP (Systematic Withdrawal Plan) | Yes. Available to investors with a minimum account balance of Rs 25,000. Monthly or quarterly option available with a choice between fixed and capital appreciation. |
| STP (Systematic Transfer Plan) | Yes. 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 tax implications arising out of their investment in this scheme. |
Fund managers
Franklin India Dynamic Accrual Fund has three fund managers, Mr. Santosh Kamath, Mr. Sachin Shankar Padwal Desai and Mr. Umesh Sharma.
Mr. Santosh Kamath
Designation and Work
- Mr. Santosh Kamath is the Managing Director and Chief Investment Officer of Fixed Income at Franklin Templeton India. In his current capacity he is responsible for fixed income funds to the tune of 6.5 billion USD.
- Mr. Kamath has over two decades of experience in asset management and has been with Franklin Templeton since 2006.
- Mr. Kamath is an award winning manager, having won the Most Astute Investor award for five consecutive years.
Education
- Mr. Kamath has an MBA from XLRI, Jamshedpur and a BE in Electronics and Telecom from REC, Bhopal.
Mr. Sachin Shankar Padwal Desai
Designation and Work
- Mr. Desai is the current Vice President of Fixed Income at Franklin Templeton India and is responsible for fixed income funds of locally managed and distributed debt products.
- Mr. Desai has 10 years of experience in banking and finance, having worked with ICICI Bank before joining Franklin Templeton.
Education
- Mr. Desai holds an engineering degree from Government College of Engineering, Pune and a PGDM from IIM, Bangalore.
Mr. Umesh Sharma
Designation and Work
- Mr. Sharma is the current Vice President of Fixed Income at Franklin Templeton India and is responsible for locally managed and distributed debt products.
- Mr. Sharma has close to a decade of experience in this field, having worked in different financial companies to tone his skillset.
Education
- Mr. Sharma is a qualified Chartered Accountant, Company Secretary and a CFA Charterholder from USA.
Investment philosophy or strategy
Franklin India Dynamic Accrual Fund follows a simple philosophy wherein the fund managers invest in high quality fixed income tools spanning different segments and categories. The fund primarily invests in Government securities and Corporate bonds which can offer steady returns on fixed income investments.
Portfolio – Sector / Top 10 holdings
| Company | Rating | Percentage |
| Reliance Broadcast Network Ltd | CARE AAA(SO) | 5.95 |
| Future Retail Ltd | CARE AA- | 5.54 |
| Renew Power Ventures Pvt Ltd | Private rating | 3.94 |
| Essel Infraprojects Ltd | BWR A-(SO) | 3.79 |
| Dolvi Minerals & Metals Ltd | BWR A-(SO) | 3.65 |
| Nufuture Digital (India) Ltd | BWR A+(SO) | 3.63 |
| SBK Properties Pvt Ltd | ICRA AA-(SO) | 3.38 |
| Sprit Textiles Pvt Ltd | BWR A+(SO) | 3.26 |
| Essel Corporate Resources Pvt Ltd | Private rating | 3.25 |
| Piramal Realty Pvt Ltd | ICRA AA+(SO) | 3.17 |
Risk measures – Last three years
The risk measures for various criteria are mentioned below (as on August 28, 2015).
| Sharpe ratio (Annualized) | 2.79 |
| R-squared | N/A |
| Beta | N/A |
| Standard Deviation | 2.02 |
Performance
| AUM | Rs 1270.66 crores (as of July 31, 2015) |
| NAV (as of 04/09/2015) |
Dividend – 11.59 Growth – 48.77 Direct Dividend – 11.83 Direct Growth – 49.66 |
Returns
The returns provided by Franklin India Dynamic Accrual Fund in comparison to market returns are shown in the table below.
| Period | Scheme returns | CRISIL Composite Bond Fund Index | CRISIL 10 year Gilt index |
| March 2012 – March 2013 | 10.12% | 9.24% | 11.25% |
| March 2013 – March 2014 | 4.26% | 4.32% | -1.01% |
| March 2014- March 2015 | 13.58% | 14.67% | 14.63% |
Expense Ratio
The current expense ratio of Franklin India Dynamic Accrual Fund is 1.82% for regular and 0.56% for direct (As of July 31, 2015).
Expert view of the fund
Franklin India Dynamic Accrual Fund is primarily designed to provide a regular source of income to investors, which means it is not a high risk fund which generally offer higher returns on investment. The fund has managed to keep pace with market returns, offering decent ROI. It can be a good investment option for individuals who just wish to supplement their income without undue risks and those who do not mind investing for a long run.
How to apply – online + distributors
Individuals looking to apply or register for Franklin India Dynamic Accrual Fund have two options – online and offline. Investors who wish to register online need to log onto the official website of Franklin Templeton India and follow a few basic steps listed on the website. They are required to provide their mobile numbers, email id, PAN and bank details in order to successfully register for this plan.
The offline registration process requires one to approach an authorised distributor and fill up an application form (KYC) providing all relevant information and submitting it to the relevant authority.
