Templeton's new equity income fund to invest in India and abroad

Mumbai: Franklin Templeton Investments (India) will launch a new open end diversified equity fund called Templeton India Equity Income Fund (TIEIF). The fund seeks to provide a combination of long-term capital appreciation and regular income investing primarily in stocks (domestic and overseas) that have current or potential attractive dividend yield. The New Fund Offer period at Rs 10 per unit (plus applicable load) will be from 22 March 2006 to 20 April  2006, and will open for ongoing purchase and redemption from 19 May 2006.

Explaining the rationale for the new fund, Chetan Sehgal, director-research, Templeton Equity, said, "Buoyed by strong foreign portfolio flows and increased interest from retail investors, the Indian markets have registered a strong rally in recent years. At the same time, investors both first time, as well as seasoned, are concerned about the increasing volatility and are looking for an investment avenue that not only helps them capture the long term potential of corporate India, but also has the ability to protect their downside relatively better. TIEIF, through its focus on dividend yields and exposure to international stocks, helps investors do exactly that. We believe that this unique fund should be part of every investor's core equity portfolio given the advantages that it offers."

Sehgal adds, "The fund will try to take advantage of the recently proposed overseas investment norms for MFs and will leverage Templeton's two decades of experience in various emerging markets to pick international stocks. Globally dividend income does matter as it constitutes a significant portion of the total return of the major indices and the fund's international focus will help investors in gaining access to other relatively higher dividend yields in other emerging markets. "

According to Sandeep Singh, national sales head, India, "Historically, a focus on high dividend yield stocks is considered to be one of the best ways to ensure a smoother ride for investors through market cycles, given the characteristics of such companies. On the other hand, diversification through international exposure to relatively higher yield securities can provide more balance to the portfolio, but also has the potential to protect their downside relatively better. We are now launching Templeton India Equity Income Fund that offers a good combination of both these aspects, and this launch will help us in further strengthening our core product offerings to Indian investors."

Templeton has been investing in emerging markets for the past 20 years with 'dividend yield' being one of the key parameters of the investment process. Headed by Dr Mark Mobius, this group manages over $25 billion and has a research presence in 12 countries. This expertise will now be available to Indian investors, for the first time.

As of February 28, 2006, Franklin Templeton had over Rs 17,996 crore of assets under management and manages 35 mutual funds catering to a host of varied investor requirements. Globally, Franklin Templeton Investments is one of the largest financial services groups and is headquartered at San Mateo, California. The group has over $484.6 billion in assets under management globally. Franklin Templeton has over 50 years of experience in investment management and with offices in over 29 countries, which provide investment management and advisory services to a client base of over 15 million shareholder accounts.