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Franklin Templeton's new India growth fund launched

DUBAI — Franklin Templeton Investments, a global investment management company, has launched a new open-ended diversified equity fund called 'Franklin India High Growth Companies Offshore Fund' (FIHGCF) in the UAE.

The fund, which is now available for investors in the Middle East, seeks to provide capital appreciation through investments in Indian companies/sectors with high growth rates. The new fund offer period is from July 15, 2007 to July 25, 2007 during which, units will be available at $10 per unit (plus applicable load). Ongoing sales will commence on July 30, 2007.

Franklin Templeton established its presence in the Gulf region in October 2000. The Dubai branch of Franklin Templeton Investment Management Limited (FTIML) is regulated by the Dubai Financial Services Authority and the group has approximately $624 billion in assets under management globally.

Commenting on the rationale for launching the new fund, Harshendu Bindal, senior director, FTIML said: "The changing investment landscape in India along with a growing recognition of the long-term potential has led to increased interest for equities amongst investors. At the same time, a large number of investors are looking for an equity product that focuses on achieving capital appreciation through fast growing Indian companies. To cater to this need, we are now launching Franklin India High Growth Companies Fund. It will adopt a growth style of investing unlike other Franklin equity funds, which follow a blended investment style."

He said: "In a rapidly growing economy like India, a growth style has performed better and is likely to sustain this performance (albeit with higher volatility) if the economy continues to grow at a rapid pace. Overall, this fund will help us in broad basing our equity product offerings and cater to the growing segment of equity investors looking for a high growth equity offering in their portfolio."

Speaking about the fund's strategy, Sivasubramanian KN, senior portfolio manager, said: "The fund's focus will be on companies offering the best trade-off between growth, risk and valuation. We will be looking for sustainable competitive advantages, proprietary intellectual property, strong management and distribution/cost advantages.

Sivasubramanian added: "The interest level of global retail investors in the India has been significant. India's stature has been growing in recent times, with the economy ranked amongst the top 10 in the world in terms of GDP and as the 4th largest in terms of purchasing power parity (PPP). Given its size and expected growth over the next few decades, an 'India-strategy' has become a must for companies across the world with global aspirations. Corporate India has become more competitive with return on equity (ROE) amongst the highest in emerging markets and is expected to benefit from the increased domestic and overseas demand. Increasing conviction about India's long term potential has led to global as well as domestic investors taking higher exposure to Indian markets, pushing the major indices to historic highs."

India-dedicated mutual funds (offshore) today manage over $35billion according to recent Bloomberg report.