In an interview with Outlook Money, Roshi Jain, Vice President and Portfolio Manager - Equity, Franklin Templeton Investments, shares her views on the fund's objective, its performance, how they pick stocks, and more. Excerpts:

What is the investment objective of this fund?
Franklin India High Growth Companies Fund is an open-end diversified equity fund that seeks to achieve capital appreciation through investments in Indian companies with high growth rates or potential over the medium- to long-term by following a combination of bottom-up stock selection blended with a top down industry theme.

How do you identify high growth companies?
Stock selection is a function of both quantitative and qualitative factors. Quantitative factors for inclusion of a stock in the portfolio would be medium term earnings growth higher than that of the market or sector and reasonable valuations. Qualitative factors would include judgement on sustainability of the business model, quality of management and governance, fair treatment of minority shareholders, etc. The attributes mentioned above are by no means exhaustive since each stock has its unique characteristics which needs to be individually considered.

What kind of stocks or companies never make the portfolio cut?
We avoid stocks which have unsustainable business models, poor history of corporate governance and treat minority shareholders unfairly.

What is the investment universe for this fund?
Since this is a diversified multi-cap fund, the investment universe spans companies across sectors and market capitalisation ranges. The objective is to identify sustainable growth companies at reasonable valuations through a combination of various quantitative tools and qualitative judgment.
There are no set limits for exposure to any particular market capitalisation range. The fund dynamically manages its market-cap allocation based on the risk reward offered by the stocks at any point in time. The discretion for cash holding at the fund manager level is a maximum of 10 per cent of assets under management(AUM).

What should an investor expect when investing through Systematic Investment Plans (SIPs) in this fund?
• Investors must ensure that investment objective of the fund is in line with their financial goals and risk taking ability.
• They should expect to take advantage of India’s longterm growth potential through investments across market-caps with a five-year investment horizon or more.
• Investing through SIPs and diversifying across asset classes is the best way to deal with market volatility and benefit from it.

What has aided the performance of this scheme in the past one year?
Maintaining the discipline of our investment process is the key to our performance.

olmdesk@outlookindia.com