Thursday, May 6, 2010

FT DYNAMIC FOF - AUTO TIMING THE MARKETS

Want a Fund which automatically books profits when the markets are overvalued and enter the markets when they are cheap???

Then, the Franklin Templeton Dynamic PE Ratio Fund of Funds is the fund for you.

Franklin Templeton Dynamic PE Ratio Fund of Funds is one of those rare funds which has an universal appeal and should be in portfolio of every investor.

This is a Hybrid fund which moves into equity and debt in a automated manner.
The Fund protects downside and behaves conservatively because of its mandate.
In another words, the fund automatically rebalances its asset allocation.


Its return since launch (October 2003) is 22.39% and 5 year returns is 22.19% comfortably beating its Category of 14.65%.

The most comforting factor is that the Fund fell by only 25.7% in 2008 when most funds were falling in the range of 70%-80%.

The returns have been on par with Equity Funds without giving you the jitters and volatility associated with Equity Funds.

The Fund, being a Fund of Funds invests in two of its in-house funds, Franklin India Blue chip fund, an Equity Diversified Fund and in Templeton India Income Fund, a Debt Fund.

ASSET ALLOCATION:
The Fund Manager, depending on the PE of the Nifty, increases/decreases his investments in these two funds.

The Fund increases its equity exposure as long as the PE of the Nifty is below 12% and gradually decreases as and when the PE of the Nifty rises and in a rare case, wherein the Nifty PE rises to above 28, the Fund acts like a Debt Fund with equity exposure being less than 10%!!!!!

The reverse happens, when the Nifty PE keeps falling, the Fund increases its Equity weight age gradually.

When the Nifty had plunged to 8000 levels (PE of 12) in March 2009, the Fund had an equity exposure of 91%!!!!

The Fund has beaten even the Balanced Funds comfortably across market cycles.

The only negative about the Fund is, it invests only in its in house funds. Also, if the markets remain bullish for a longer time, the Fund will fail to capture the gains, due to its PE strategy.

The Fund, which dynamically allocates between equity and debt, is apt choice for investors who want to have equity exposure but are shy of risks and volatility associated with it.

Those of you investors, who have no time for asset allocation, should seriously consider having this fund in your portfolio.

Regards,

Srikanth Matrubai
Also visit
http://equityadvise.blogspot.com

1 comment:

  1. Really great analysis Investors will really like your post Keep it!!!!!!!!!!!!!!!!!UP.

    ReplyDelete

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