Mumbai: Franklin Templeton Investments (India), is launching a new open end equity fund called Franklin Asian Equity Fund (FAEF).
The fund invests in companies in the Asian region (except Japan) and Asia-related companies across market capitalization ranges. The New Fund Offer period will be from 19November to 18December 2007 during which, units will be available at Rs10 per unit (plus applicable load).
According to Vivek Kudva, president, Franklin Templeton India leading Asian economies have been exhibiting strong growth, helped by strong exports and growing domestic consumption. The positive macroeconomic landscape has helped Asian companies to grow in stature over the past few years, some of which have transformed themselves into global players.
The strong economic and corporate fundamentals have resulted in global investors increasing their allocation to Asian markets, including India. While Indian equity markets have turned in a good performance in recent years, there are quite a few Asian markets which have done better.
In that sense, this fund will not only help Indian investors in improving diversification of their portfolio but will also have a long term return potential, similar to that of Indian markets.
The portfolio construction will be bolstered by local investment teams in India, Korea and China, which have accumulated several years of experience in investing in companies in Asia and built an extensive research database.
Sukumar Rajah, CIO, Franklin Equity and principal portfolio manager for the fund, added, “Asia’s growth drivers include a skilled and growing labour force, increased domestic spending and strong foreign investments. Increasing domestic consumption, redeployment of savings and global integration could boost growth further.”
On the whole, low gearing and interest expenses along with relatively high ROEs augur well for the expansion of market capitalization in many Asian countries. Such expansion in capitalization would then reflect the region’s true economic potential. While there are a few near-term risks such as high energy costs, export dependence and ongoing geopolitical tensions, we expect Asia’s strong fundamentals to assert themselves over the medium to long term.