Franklin India Smaller Companies Fund A closed end equity fund that seeks to provide long term growth through mid and small companies Economic growth in India is expected to be strong on the back of the global outsourcing trend and increased domestic demand. Smaller companies are expected to benefit the most from the wide range of opportunities arising out of this robust growth. However, given the characteristics of these companies, one needs to take a long term view to reap the 'complete' benefits of the higher growth potential.Designed to help you achieve this is the new equity fund from
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Designed to help you achieve this is the new equity fund from Franklin Templeton - Franklin India Smaller Companies Fund (FISCF). It is a 5 year closed-end equity fund, that seeks to provide long-term capital appreciation by investing in stocks in the mid and small cap space.

Why invest in FISCF ?

Smaller companies offer higher potential growth : Historical evidence suggests that stocks of smaller companies (mid & small cap) exhibit higher growth over the long term, compared to large firms. Moreover, smaller companies are not as widely researched as their larger counterparts, which means there are opportunities to uncover companies at an early stage in their development, before they are discovered by the markets.

The closed end advantage : The closed-end nature of the fund would mean that the investment team can take a long term perspective, without getting impacted by asset flows in and out of the fund. This is especially useful while investing in smaller companies, given the possible volatility in earnings over short term and consequently their share prices.

There is an option to withdraw investments in part or in full every six months during a pre-determined 7-day period, to meet any urgent needs (subject to applicable charges).

Equities deliver: There is a growing global consensus about India's potential to become one of the largest economies in the world. The recent strong economic growth places India amongst the fastest growing economies in the world and key drivers such as - investment led by corporate India and infrastructure spending, increased consumption driven by positive demographics and global outsourcing, are expected to help sustain this growth.

This can help corporate India in sustaining the robust earnings growth witnessed in recent times, which will reflect in their stock prices. As a result, equities as an asset class are expected to provide superior risk-adjusted returns over the long term, notwithstanding the short term volatility.

Tax benefits : The absence of any long term capital gains tax is a key advantage for long term equity investors (however, investors are liable to pay Securities Transaction Tax as applicable).

Why Franklin Templeton?

Franklin Templeton manages the largest* equity assets in the private sector - Rs.7546 crores across a diverse range of funds with different investment focus and styles. The fact that it has 3 equity funds in its stable with a performance track record of over 10 years is a reflection of the depth and experience of its investment team. Moreover, it manages the largest* and oldest open end equity fund focusing on mid and small cap companies - Franklin India Prima Fund, which has delivered superior risk-adjusted returns since its inception.

 
Last 1
year
Last 3
year
Last 5
year
Last 7
year
Last 10
year
Since
inception
FIPF
69.7%
78.3%
50.7%
45.6%
25.7%
25.5%
S&P CNX 500
37.7%
44.0%
19.4%
20.2%
11.3%
7.8%
Past performance may or may not be sustained in future. 
Annualised & Compounded returns based on 31.10.2005 Growth Plan NAV of Rs.149.40. Inception Date: Dec 1, 1993. Sales load is not taken into consideration. *Source: AMFI Website as on October 31, 2005.

This experience of investing in smaller companies is now available to you. Click Here to Invest Online

Summing up

Smaller companies offer the potential for higher growth, but one needs to choose the right companies with a long term perspective. Franklin India Smaller Companies Fund seeks to do this for you in a single investment.

Franklin India Smaller Companies Fund - NFO Features

  • New Fund Offer : November 16, 2005 - December 14, 2005
  • Date of Allotment. January 13, 2006
  • Offer Price. Face Value of Rs.10 per unit
  • Plan/Options. Growth & Dividend with Reinvestment and Payout facilities
  • Min. Investment Amount. Rs.5,000
  • Load Structure. Entry: Nil
  • CDSC. On Redemption /Repurchase / Switch-out before maturity of the fund:

    Redemption period
    (from the date of allotment)    		 as % of NAV
    Upto 12 months
    4%
    After 12 months but upto 24 months
    3%
    After 24 months but upto 36 months
    2%
    After 36 months but upto 48 months
    1%
    After 48 months but upto 54 months
    0.5%
     
  • Automatic Conversion. Upon maturity, the fund will automatically be converted into an open end fund                                                                                                                                           Offer Document
Scheme Classification and Objective: Franklin India Prima Fund (FIPF) is an open ended growth scheme with an objective to provide medium to long term capital appreciation as a primary objective and income as a secondary objective. Load Structure: FIPF: Entry Load: Less than Rs.25 Crs: 2.25%; *Rs.25 Crs & above: Nil. Exit Load: Less than Rs.25 Crs: Nil; *Rs.25 Crs & above: 2% (If redeemed within 1 year of allotment) * Applicable only for fresh investment accounts of Rs.25 crores and above made on or after April 1, 2005. In such accounts, every additional purchase of Rs.2 crores and above will also attract the same load structure provided that a minimum balance of Rs.25 crores is maintained throughout other than fluctuations in such value as a result of change in the Net Asset due to market conditions. In case the balance falls below Rs. 25 crores (due to redemption), an additional purchase (subject to a minimum of Rs. 2 crores) will also attract the same load structure. Franklin India Smaller Companies Fund (FISCF) is a closed end diversified equity fund that seeks to provide long term capital appreciation by investing in mid and small cap companies. Equities and Equity-linked instruments: 75%-100% out of which, Smaller Companies& 75%- 100%, Other Companies# 0%-25%; Debt securities (including securitised debt), Money Market Instruments & Cash: 0%-25% (investments in ADR/GDR/foreign securities upto 50% of the equity/ debt portion; exposure in derivatives upto a maximum of 50%). &Smaller Company - Any company, which has a market capitalisation below that of the 100th stock in S&P CNX 500 Index. #Other Company - Any company which has market capitalization of the 100th stock and above in S&P CNX 500 Index. Risk Factor: All investments in mutual funds and securities are subject to market risks and the NAV of the scheme may go up or down depending upon the factors and forces affecting the securities market. There can be no assurance that the schemes investment objectives will be achieved. The past performance of the mutual fund managed by the Franklin Templeton Group and its affiliates is not necessarily indicative of future performance of the schemes. The above are only the names of the scheme and do not in any manner indicate the quality of the schemes, their future prospects or returns. The Mutual Fund is not guaranteeing or assuring any dividend under the scheme and the payment of the dividend is subject to availability of distributable surplus. The investments made by the schemes are subject to external risks. Please read the offer document carefully before investing. Statutory Details: Franklin Templeton Mutual Fund in India has been set up as a trust by Templeton International Inc. (liability restricted to the seed corpus of Rs.1 lac) with Franklin Templeton Trustee Services Pvt. Ltd. as the Trustee (Trustee under the Indian Trust Act, 1882) and Franklin Templeton Asset Management (India) Pvt. Ltd. as the Investment Manager.