Invest In Franklin India Prima Plus: A Guide

Franklin India Prima Fund is an open-ended mid-cap equity scheme that falls under the Franklin Templeton Mutual Fund House. It was launched on 1 December 1993 and is mandated to invest at least 65% of its assets in mid-cap stocks. The fund has a very high risk profile and is suitable for investors who are looking to invest money for at least 3-4 years and are seeking high returns. The fund has a minimum investment requirement of ₹5,000 and a minimum SIP investment of ₹500. Investors can purchase the fund directly from the Franklin Templeton Mutual Fund website or through platforms like MF Central and MF Utility.

Where to buy Franklin India Prima Fund units

Franklin India Prima Fund units can be purchased directly from the website of the fund house, Franklin Templeton Mutual Fund. The fund house's website provides information on the fund's performance, portfolio, and other details.

You can also buy Franklin India Prima Fund units through platforms like MF Central and MF Utility. Most banks also act as mutual fund distributors, so you can connect with your bank for assistance in purchasing these units.

When investing in Franklin India Prima Fund, it is important to note that it is a high-risk investment option, and you should only invest if you are comfortable with the associated risks. The fund has no lock-in period, but it is recommended that you invest for at least seven years to beat inflation and fixed-income options.

Capital gains taxation

Franklin India Prima Fund is an open-ended growth scheme with a primary objective of providing medium to long-term capital appreciation and a secondary objective of income generation. When investing in this fund, it is important to understand the capital gains taxation rules to make informed decisions.

If you sell the mutual fund units of Franklin India Prima Fund after one year from the date of investment, gains up to Rs 1.25 lakh in a financial year are exempt from tax. However, gains exceeding Rs 1.25 lakh are taxed at a rate of 12.5%. On the other hand, if you sell the units within one year of investment, the entire amount of gain is taxed at a rate of 20%.

It is important to note that as long as you continue to hold the units, you do not have to pay any tax. Dividends are treated differently and are added to the income of the investors, taxed according to their respective tax slabs. Additionally, if an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house deducts a TDS of 10% before distributing the dividend.

Investment suitability

Franklin India Prima Fund is an open-ended Mid Cap Equity scheme that falls under the Franklin Templeton Mutual Fund House. It was launched on 1 December 1993.

The fund is suitable for investors looking to invest money for at least 3-4 years and looking for high returns. However, investors should also be ready for the possibility of moderate losses in their investments. It is important to note that the fund has a very high risk of negative returns, as per SEBI's Riskometer and latest guidelines. Therefore, it is not suitable for investors who are risk-averse.

The fund has no lock-in period, but investors should not invest in this or any other mid-cap fund if they need to redeem their investment in less than seven years. The fund has an exit load of 1% if redeemed within one year.

The fund is mandated to invest at least 65% of its assets in mid-cap stocks at all times. It has a minimum investment of ₹5,000 and a minimum SIP investment of ₹500. The expense ratio is 1.76%, which is higher than the category average.

Franklin India Prima Fund has delivered 19.97% returns since its inception. Its trailing returns over different time periods are: 52.87% (1yr), 23.31% (3yr), 24.73% (5yr). The fund size is currently ₹12,529.29 Cr, with assets under management worth ₹12529.29 crore as of 31 July 2024.

The fund has 96.84% investment in domestic equities, with a breakdown of 8.89%-46.09% in Large Cap stocks, 46.5% in Mid Cap stocks, and 19% in Small Cap stocks. The top 10 equity holdings constitute around 24.65% of the assets, while the top 3 sectors constitute around 39.16% of the assets.

In terms of taxation, if the mutual fund units are sold after 1 year from the date of investment, gains up to Rs 1.25 lakh in a financial year are exempt from tax. Gains over Rs 1.25 lakh are taxed at the rate of 12.5%. If the units are sold within 1 year, the entire amount of gain is taxed at the rate of 20%. Dividends are added to the income of the investors and taxed according to their respective tax slabs. If an investor's dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS of 10% before distributing the dividend.

Investment time horizon

When considering investing in the Franklin India Prima Fund, it is important to understand the suggested investment horizon. This is the minimum time period that investors should plan to hold their investments in the fund to reduce downside risks and make returns more predictable. For the Franklin India Prima Fund, the suggested investment horizon is more than three years.

This investment horizon is important because the fund primarily invests in medium-sized companies, which tend to experience more severe ups and downs than larger companies. While these investments can lead to higher returns in the long term, they come with higher risks. Therefore, investors should be prepared to hold their investments for at least three years to smoothen out the short-term volatility and maximise the chances of achieving positive returns.

The fund's historical performance supports this suggested investment horizon. As of August 2024, the fund had delivered returns of 19.97% since its inception almost 31 years ago. Over shorter periods, the returns have been more variable, with 52.87% returns over one year, 23.31% over three years, and 24.73% over five years. These fluctuations highlight the importance of a longer-term investment horizon to ride out any short-term market volatility.

Additionally, the fund's tax structure also favours long-term investments. Short-term capital gains, realised within one year of investment, are taxed at a rate of 20%. On the other hand, long-term capital gains, realised after holding the investment for more than one year, are taxed at a lower rate of 12.5% for gains exceeding Rs. 1.25 lakh in a financial year. This tax structure encourages investors to adopt a longer-term perspective when investing in the Franklin India Prima Fund.

In conclusion, the Franklin India Prima Fund is suitable for investors with a long-term investment horizon of more than three years. This investment horizon helps to align with the fund's investment strategy, smoothen out market volatility, and take advantage of the favourable tax structure for long-term capital gains.

Investment minimums

The minimum investment required for the Franklin India Prima Fund is Rs 5,000, with a minimum additional investment of Rs 1,000. The minimum SIP investment is Rs 500.

The fund has a high-risk profile, and investors are advised not to invest in it if they need to redeem their investment in under seven years. The fund has no lock-in period.

The expense ratio of the fund is 1.76% for the Regular plan. The fund size is Rs 12,529.29 Cr, with 3.21% of investment in the category.

Frequently asked questions