Templeton India Equity Income Fund

Templeton India Equity Income Fund is being managed by Dr Mark Mobius a global investor and emerging markets fund manager. He is assisted by Chetan Sehgal and Vikas Chiranewal. Fund managers have used the value style of investing along with focus on stocks with attractive dividend yields, both in India and overseas. The fund’s returns have been average compared to above average risk its portfolio bears compared to its peers. If you have invested in this fund, keep a close watch on where performance is headed. New investors who wish to expose their portfolio to foreign equities can give it a shot.

Where does Templeton India Equity Income Fund invest your money?

Templeton India Equity Income Fund is a multi cap fund which invests your money in companies that have a currently or potentially attractive dividend yield across market caps both in India and overseas. Although it can invest up to 50% of its assets in foreign equity it has never exceeded the 35% limit so far. The portfolio has 48% exposure to large cap companies, 41% exposure to mid cap companies and 11% exposure to small cap companies. Large cap companies are stable in returns compared with mid cap and small cap companies. However it is the small & mid cap companies that have huge prospects of bumper returns.

Suitable for what?
  • Creation of wealth
  • Short term Needs
Not Suitable for?
  • Child' s Education
  • Child's Marriage
  • Planning for Retirement
  • Buying a house 
How much to invest?

Minimum SIP is Rs 500 per month. Do not make Templeton India Equity Income Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Templeton India Equity Income Fund can be part of your satellite portfolio. Do not do the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Not Recommended
How has Templeton India Equity Income Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in May 2006 the value of your investments would be around Rs 1.9 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.5 lakhs. The performance has been not better than or similar to other mutual funds in this category. The fund has been giving at around 9% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in Templeton India Equity Income Fund through SIP for the past 5 years today you would have around Rs 7.7 lakhs.

How will Templeton India Equity Income Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to de well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 9% then you can expect top performing mutual funds to give you returns in excess of 15%. We advise you to avoid too much of star gazing and future prediction.  Be reminded that equities are one of the asset classes that have the potential to beat inflation.  Your aim for core portfolio should be to beat inflation.

When to review performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

What charges apply?

A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of Templeton India Equity Income Fund is 2.22%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to exit?

Withdraw when your goals are closer to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. Templeton India Equity Income Fund does not qualify for sec 80C ELSS benefits.

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