Franklin India Government Securities Fund (FIGSF) is an open ended gilt scheme which primarily invests in government bonds, offering a relatively safe investment option to investors. It is a flexible fund which provides investors an opportunity to choose an appropriate investment period. The only risk factor involved here is related to changes in interest rates and nil credit risk, making it a low risk investment.
Type or nature of fund
Franklin India Government Securities Fund is an open ended dedicated gilt scheme.
Investment objective
The primary objective of Franklin India Government Securities Fund is to invest in government issued sovereign securities to provide credit risk free returns to investors.
Fund information
| Inception date | FIGSF Composite Plan : 21 June, 1999 FIGSF PF Plan : 7 May, 2004 FIGSF Long Term Plan – 7 Dec, 2001 |
| CRISIL rank | CRISIl ranks this 3 in Gift long category |
| Schemes | •Composite Plan •Long Term Plan •Direct Composite Plan •Direct Long Term Plan •PF Plan •Direct PF Plan |
| Entry load | Nil |
| Exit load | FIGSF – CP/PF Plan – 0.50% if redemption is within 3 months of allotment date FIGSF – LT Plan - Nil |
| Minimum investment | FIGSF CP/LT – Rs 10,000 and Rs 25,000 FIGSF PF – Rs 25,000 |
| Product label – Risk and target investors | Low Risk product designed for investors looking for medium term capital appreciation with their current source of income through investments in Indian government securities. |
| Benchmark | I-Sec Composite Index for CP and PF I-Sec Li-BEX for LT
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| SIP (Systematic Investment Plan) | •Rs 1,000 (12 SIP investments of Rs 1,000 each - minimum) |
| SWP (Systematic Withdrawal Plan) | Yes. Investors with a minimum account balance of Rs 25,000 can opt for SWP which offers a choice between a monthly or quarterly withdrawal mode. |
| STP (Systematic Transfer Plan) | Yes. Any redeemed unit needs to be reinvested in another plan. |
| Redemption | Minimum Redemption Amount – Rs 1,000. |
| Taxation (on investment and on redemption) | Investors are advised to consult their tax consultant to get a clear picture of tax implications arising out of their investment in this scheme. |
Fund managers
Franklin India Government Securities Fund has two fund managers, Mr. Sachin Shankar Padwal Desai and Mr. Umesh Sharma.
Mr. Sachin Shankar Padwal Desai
Designation and Work
- Mr. Desai is the VP - Fixed Income at Franklin Templeton India and is in charge of fixed income funds.
- Mr. Desai has over 10 years of experience in investment, having previously worked with ICICI Bank.
Education
- Mr. Desai completed his engineering from Government College of Engineering, Pune and PGDM from IIM, Bangalore.
Mr. Umesh Sharma
Designation and Work
- Mr. Sharma is the VP of Fixed Income at Franklin Templeton India and is in charge of locally managed and distributed debt products.
- Mr. Sharma has almost 10 years of experience in this field, having worked in different financial companies to tone his skillset before joining Franklin Templeton.
Education
- Mr. Sharma is a qualified CA, CS and CFA Charterholder from USA.
Investment philosophy or strategy
Franklin India Government Securities Fund follows a simple and risk free strategy wherein fund managers invest in government securities or securities with unconditional guarantees by the government. It seeks to widen the horizon by investing in different plans like Treasury Plan, PF Plan, Long Term Plan and Composite Plan and actively manages the funds keeping in mind market conditions. This investment policy is traditionally risk free and offers investors peace of mind.
Portfolio – Sector / Top 10 holdings
| Securities Description | Rating | Percentage |
| 8.60% of GOI 2028 | Sovereign | 31.58 |
| 9.20% of GOI 2030 | Sovereign | 27.81 |
| 9.23% of GOI 2043 | Sovereign | 25.81 |
| 8.17% of GOI 2044 | Sovereign | 12.36 |
| 8.17% of GOI 2044 (Long term) | Sovereign | 8.22 |
| 8.40% of GOI 2024 | Sovereign | 6.21 |
| 8.60% of GOI 2028 | Sovereign | 4.56 |
| 8.15% of GOI 2026 | Sovereign | 4.34 |
| 8.27% of GOI 2020 | Sovereign | 1.08 |
| 8.27% of GOI 2020 (PF) | Sovereign | 1.22 |
Risk measures – Last three years
The risk measures for various criteria are mentioned below (as on August 28, 2015).
| Sharpe ratio (Annualized) | 1.42 |
| Alpha | -0.5 |
| Beta | 1.25 |
| Standard Deviation | 1.42 |
Performance
| AUM (as of May 29, 2015) | FIGSF CP – Rs 82.31 crores FIGSF LT - Rs 388.41 crores |
| NAV (as of 07/09/2015) | Dividend – 11.48 Growth – 33.48 Direct Dividend – 34.04 Direct Growth – 11.80 |
Returns
The returns provided by Franklin India Government Securities Fund in comparison to market returns are shown in the table below.
| Period | Scheme returns | I-Sec Li-BEX | CRISIL 10 year Gilt index |
| March 2012 – March 2013 | 9.46% | 13.28% | 11.25% |
| March 2013 – March 2014 | 0.62% | 1.60% | -1.01% |
| March 2014- March 2015 | 20.46% | 20.08% | 14.63% |
Expense Ratio
The current expense ratio of Franklin India Government Securities Fund is 1.73% for regular and 0.48% for direct (As of July 31, 2015).
Expert view of the fund
Franklin India Government Securities Fund is a low risk investment option for individuals looking to invest their money without having to worry about their investments failing. The fund offers decent growth options, depending on investment period and has performed comparatively well since its inception. Multiple plan options enable investors to choose a plan which best suits their needs, offering them flexibility and convenience. This plan can be a good investment option for individuals who have extra money and who would rather invest it in low risk funds.
How to apply
Individuals looking to invest in this fund can do so either through the official website of Franklin Templeton India or by visiting an anuthorised branch. They will have to fill up relevant forms, providing some basic information like mobile number, email id, PAN and Bank details in order to successfully register themselves for this fund.
