Franklin India Income Opportunities Fund is an open ended income fund which aims to provide regular income to investors by investing in fixed income securities. Its prime focus is on accrual in current market environments with greater attention on corporate debt securities. This fund primarily invests in companies across different sectors in a bid to reduce risk.
Type or nature of fund
Franklin India Income Opportunities Fund is an open ended income fund.
Investment objective
The primary objective of Franklin India Income Opportunities Fund is to invest in fixed income securities in order to provide a regular source of income and capital appreciation to investors.
Fund information
| Inception date | December 11, 2009 |
| CRISIL rank | Ranked 3 by CRISIL in Credit Opportunities Funds |
| Schemes |
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| Entry load | Nil |
| Exit load | 3% for redemptions within 1 year of allotment 2% for redemptions after 12 months and before 18 months from allotment date 1% for redemptions after 18 months and before 24 months from allotment date |
| Minimum investment | Rs 5,000 |
| Product label – Risk and target investors | Low Risk product designed for investors looking for medium to long term capital appreciation with their current income through investments in accrual securities. |
| Benchmark | CRISIL Short Term 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 wherein they can choose between a monthly or quarterly mode with a further choice between fixed and capital appreciation. |
| STP (Systematic Transfer Plan) | Yes. All redeemed units need to be reinvested in another scheme. |
| Redemption | Minimum Redemption Amount – Rs 1,000. |
| Taxation (on investment and on redemption) | Investors should consult a tax expert to know the tax implications arising out of their investment in this scheme. |
Fund managers
Franklin India Income Opportunities Fund has two fund managers, Mr. Santosh Kamath and Mr. Sumit Gupta.
Mr. Sumit Gupta
Designation and Work- Mr. Sumit Gupta is the portfolio manager of fixed income funds and is in charge of structured finance deals and evaluating company credit.
- Mr. Gupta has almost a decade of experience in debt markets and was previously involved with Kotak Mahindra Bank and Ocwen Structured Investments.
- Mr. Gupta did his Btech from IIT, Delhi and PGDM from IIM, Calcutta.
Mr. Santosh Kamath
Designation and Work- Mr. Santosh Kamath is the MD and Chief Investment Officer - Fixed Income at Franklin Templeton India and is responsible for fixed income funds worth 6.5 billion USD in his current capacity.
- Mr. Kamath has over two decades of experience in asset management and has been with Franklin Templeton since 2006.
- Mr. Kamath is known for his astute investment sense and is an award winning investor.
- Mr. Kamath completed his BE in Electronics and Telecom from REC, Bhopal and MBA from XLRI, Jamshedpur.
Investment philosophy or strategy
Franklin India Income Opportunities Fund focuses on investments in fixed income securities with high adaptability. Fund managers choose investments based on both micro and macro analysis to focus on current market trends. The ability of fund managers to concentrate on corporate debt and securitized debt papers make it a fund which yields high results at lower interest rate risks.
Portfolio – Sector / Top 10 holdings
| Company | Rating | Percentage |
| Shriram Transport Finance Company Ltd | IND AA+ | 8.68 |
| Future Retail Limited | CARE AA-- | 5.57 |
| Dewan Housing Finance Corporation Ltd | CARE AAA | 5.09 |
| HPCL Mittal Pipelines Ltd | ICRA AA- | 4.8 |
| HPCL Mittal Energy Ltd | ICRA AA- | 4.39 |
| Jindal Power Limited | ICRA AA- | 4.38 |
| Jindal Steel and Power Ltd | CRISIL AA- | 4.38 |
| Hinduja Leyland Finance Ltd | IND A+ | 4.25 |
| JSW Steel Limited | CARE AA | 3.73 |
| JSW Energy Limited | CARE AA- | 3.61 |
Risk measures – Last three years
The risk measures for various criteria are mentioned below (as on August 28, 2015)
| Sharpe ratio (Annualized) | 3.47 |
| Sortino | 4.99 |
| Beta | N/A |
| Standard Deviation | 1.1 |
Performance
| AUM | Rs 4555.09 crores (as of June 30, 2015) |
| NAV (as of 07/09/2015) |
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Returns
The returns provided by Franklin India Income Opportunities Fund in comparison to market returns are shown in the table below.
| Period | Scheme returns | CRISIL Short Term Bond Fund Index | CRISIL 10 year Gilt index |
| March 2012 – March 2013 | 10.53% | 9.05% | 11.25% |
| March 2013 – March 2014 | 8.85% | 8.78% | -1.01% |
| March 2014- March 2015 | 11.90% | 10.40% | 14.63% |
Expense Ratio
The current expense ratio of Franklin India Income Opportunities Fund is 1.69% for regular and 0.70% for direct (As of July 31, 2015).
Expert view of the fund
Franklin India Income Opportunities Fund comes from a stable of highly accredited funds managed by a company with a long history of fund management. This current fund has not really set the markets on fire, performing on par with markets, which is perhaps all that is expected from it, given its low risk profile. Smart investment choices by fund managers and in depth research have helped this fund stay afloat among its competitors and it could be a decent investment option for individuals looking for average returns without high risks.
How to apply
Individuals looking to invest in Franklin India Income Opportunities Fund first need to register themselves. This registration can be done either online, through the internet or offline, through traditional branches. Online registration requires individuals to log onto the official website of Franklin Templeton India and register by providing their basic information like phone number, email id, bank account details and PAN details.
Offline registration can be done at authorised branches and individuals should fill out an application form, providing certain details which are required.
