Franklin India Fund

24 August 2021

3 minute read

Like most other economies around the world, the global pandemic has had a significant impact on the lives of the Indian population and on the Indian economy. We take a look at a fund which focuses on the ‘higher quality’ businesses in India, which may well have the potential to withstand the impact and come out of this crisis stronger than most.

Who's it for? All investors

India is one of the largest and most dynamic national economies in the world. The country enjoys a number of structural growth drivers, such as a young population, rising consumption, and a high savings rate which, over the long term, could keep the economy on an upward trajectory. While China takes the headlines in South East Asia, there’s a lot to be said about adding a bit of India to your investment portfolio.

Why India?

The spike in Covid cases in the first half of 2021 had a devastating impact on life in India. And it will no doubt leave an impact on India’s economy. Expectations are that the economy will rebound on the back of the vaccination drive, as we’ve seen across other global markets.

It’s worth reminding ourselves that stock markets price in future growth and future profitability, so it would not be unreasonable to expect the Indian stock markets to recover before the economy recovers, so long as investors remain positive and markets have confidence in the trajectory of business activity in India.

The team at Franklin conducts numerous on-the-ground checks and they continue to suggest that companies remain positive on a recovery during 2021 and 2022.

The importance of high quality businesses

The pandemic has emphasised the importance of investing in companies with good management who know how to act in a time of crisis, by taking appropriate cost-cutting and process adjustments. In addition, it has highlighted that companies which have a lot of cash to draw on or have little to no debt to pay, should remain in focus.

Generally, while not all Indian companies will come out of the crisis unscathed, these sorts of higher quality businesses have the potential to come out of the crisis strongly. And it’s these higher quality businesses that the Franklin India Fund focuses its attention on.

Franklin India Fund

The team at Franklin is based in India and Singapore, and is one of the largest investment teams dedicated to research and investing in India’s domestic equity market. The fund managers themselves are very experienced in managing Indian equities. We believe the local presence in Asia gives the team an edge in terms of research and insight.

What we like about the team at Franklin is how they follow the same strict and repeatable investment process when it comes to managing the Franklin India Fund. This investment process involves looking for high quality companies where there is a high visibility of future profitability, which can potentially offer stability during volatile market conditions. Together, we feel it offers an interesting way to invest in Indian companies.

For those investors looking to add a bit of India to their investment portfolio, we feel the Franklin India Fund is worth considering.

In addition to the Franklin India Fund, there are three more Funds on the Barclays Funds List that invest across Asia and another two which invest across Global Emerging Markets. Find out more information on these funds.

Correct at the time of publishing.

To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.

Past performance of the fund and its manager are not a reliable indicator of their future performance.

We don’t offer personal investment advice so if you’re unsure you should seek that independently.

Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.

These are our current opinions but the future, as ever, is uncertain and outcomes may differ.

Read the Assessment of Value report [PDF, 3.2MB] for funds run by Barclays.

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