FRANKLIN INDIA HIGH GROWTH COMPANIES - New Fund Offer - Details and analysis

Fund closing on June 29th 2007.. (details attached here)

Franklin Templeton has launched a new fund - Franklin India High Growth Companies Fund (FIHGCF) an open ended diversified equity fund closing on The Fund's clear USPs are as follows:

1. Combines the Aggressiveness of Franklin's Style of Investing with the conservatism of Templeton Approach.
2. Open-Ended Diversified Multi-Cap Fund. Fund Positioning a tad less aggressive than Franklin India Opportunities Fund.
3. The present Fund is managed by K Siva Subramaniam (One of the most respected Fund Managers in Asia who has seen more than 12 years of market cycles
4. Track-Record of Templeton has always been in the top quartile but never flashy or flamboyant (Like Reliance) or Inconsistent (Like some Mutual Fund Houses).

NFO Details Investment Objective :

This fund seeks to achieve Capital appreciation through investments in Indian Companies/Sectors with high growth rates or potential.

Key Features :

Growth style of investing could provide relatively higher returns in a fast growing economy like India The combination of top-down and bottom-up analysis helps in identifying the fastest growing companies in terms of earnings and sales, amongst the various sectors benefiting from India's economic growth
Investors with an appropriate risk profile can benefit from Templetons experience of identifying growth companies for over 12 years across market cycles.
A high growth strategy is complementary to a core equity portfolio.
Asset Allocation pattern : Type of Instuments Normal Allocation# (Min%-Max%) Equity and Equity Linked Instruments 70% - 100% Debt securities* and Money Market Instruments 0% - 30% # Including investments in Foreign Securities as may be permitted by SEBI/RBI up to 35% of the net assets of the scheme, exposure in derivatives up to a maximum of 50%
* Including securitised debt up to 30% NFO Dates : May 31, 2007 - June 29, 2007 Load Structure (during the NFO) o Entry load - 2.25% (Less than Rs. 5 Crs) & Nil (Rs. 5 Crs & above) o Exit load - 0.5% for redemption within 6 months and 1% for redemptions within 1 year. Minimum investment - Rs. 5000 and in multiples of Rs. 1 SIP - Minimum amount Rs 1000 for 12 months Also find below some factors which help us selling this fund effectively

Suitability: This fund is suitable for Agressive and Long Term investors.

Plus Points:
The objective of investing in high growth companies is expected to benefit the fund as these companies would be the beneficiaries of the strong economic growth to be witnessed by the Indian economy in the coming years .
Increased interest for equities among Indian investors and concentration on companies with high growth prospects should be a positive for the fund, provided the fund manager picks the right companies.

Key Distinguishing Factors:

The fund has the leeway to invest in high growth companies across marketcaps i.e. largecap, midcap and smallcap
Benefit of employing blend of top down and bottom up approach
Sound fund management track record

Risk Factors :

High interest rates and inflation could have an adverse impact on the profitability and revenues of companies in the midcap and smallcap segment
Any correction or consolidation in the euqity markets would result in the midcaps and smallcaps underperforming the largecaps and adversely affect the fund's performance