Franklin Templeton Mutual Fund is one of the oldest fund houses in the country, having over 30 years of track record.
It made its entry into India with the acquisition of Kothari Pioneer Mutual Fund in July 2002, which was India’s first private sector mutual fund launched in 1993. In those days, there were just nine fund houses managing assets of around Rs 470 billion (bn).
The first two schemes, Kothari Pioneer Bluechip Fund and Kothari Pioneer Prima Fund, were launched in December 1993.
After the acquisition by Franklin Templeton, these became Franklin India Bluechip Fund (now known as Franklin India Large Cap Fund) and Franklin India Prima Fund (now known as Franklin India Mid Cap Fund). Both funds have completed over 30 years.
Three-fourths of the funds from Franklin Templeton Mutual Fund have more than a decade-long track record. Today, Franklin Templeton Mutual manages assets over Rs 1.22 trillion (tn) in India.
It offers products across asset classes – equity, debt, hybrid, as well as gold and silver. The fund house has over 2.3 million (m) folios across categories of schemes and has a pan-India presence.
In 2020, during the COVID-19 pandemic, the fund abruptly wound up six debt mutual fund schemes (due to credit quality and liquidity of the underlying portfolios being impacted), putting investors in panic initially, but did not write off those investments, and after being pulled by the regulator, eventually paid off its unitholders in around 3 years.
This also highlights why underlying portfolio characteristics are so important when choosing schemes and not just the returns.
In this editorial, we explain the top three equity schemes from Franklin Templeton Mutual Fund with distinct investment mandates, considering longer period rolling returns, the risks involved and the risk-reward ratios.
#1 Franklin India Mid Cap Fund
This fund, as mentioned earlier, was known as Frankin India Prima Fund and launched in December 1993. However, to reflect its investment approach and for investors to identify it better, it was renamed Franklin India Mid Cap Fund in July 2025.
As of October 2025, this fund manages an AUM of over Rs 127 bn.
It invests at least 65% of its total assets in equity & equity-related instruments of midcap companies. Midcaps are companies from 101st to 250th on a full market capitalisation basis.
Other than midcaps, it also invests up to 35% of its total assets in other companies (which include smallcaps and largecaps).
Within equities, it has the mandate to invest up to 50% for hedging and portfolio rebalancing purposes.
Furthermore, for defensive purposes and liquidity considerations, it invests up to 35% in debt & money market instruments.
Given the allocation, the investment objective is to provide medium to medium to long-term capital appreciation as a primary objective and income as a secondary objective. There is no assurance that the investment objective of the scheme will be achieved.
The fund aims to identify companies at an early stage of the business life cycle, as they have a greater potential for growth. It follows a blend of value and growth style of investing, while choosing stocks from across sectors bottom-up.
The fund holds a diversified portfolio of midcap and other stocks as per the asset allocation set out.
Usually, it holds 70-90 stocks in its portfolio. As of October 2025, it has 87 stocks, of which 67% are midcaps, 14% smallcaps, and 14% largecaps.
The top 10 stocks are around 21.3% of the portfolio and include names such as Federal Bank (3%), Cummins India (2.4%), Mphasis (2.3%), etc. So, no stock in the top 10 list is more than 5% of the portfolio.
Among the various sectors, the top 3 are auto & ancillaries (12%), healthcare (9.6%), and banks (9.6%), constituting 31.3% of the portfolio.
Currently, the fund is holding 3.3% of its assets in cash & cash equivalents and 0.2% in treasury bills.
Overall, the fund follows a buy-and-hold policy for stocks to realise their full growth potential until valuations begin to look expensive. The portfolio turnover ratio in the last one year has ranged between 23-25%.
The strategy has yielded decent returns for investors over 3 years, with a compounded annualised return of 23.7%, a bit higher than the benchmark, the Nifty Midcap 150 – TRI.
However, over 5 years and 7 years, the fund has lagged in performance vis-à-vis the benchmark, as a portion of its portfolio is impacted by the cyclicality.
The risk taken by the fund (standard deviation of 14.38) over 3 years is slightly less than its benchmark.
However, it has adequately rewarded investors well on a risk-adjusted basis (sharpe and sortino ratios of 0.35 and 0.7, respectively), which is higher than the Nifty Midcap 150 – TRI.
#2 Franklin India Flexi Cap Fund
This scheme was launched in September 1994, as the Kothari Pioneer Prima Plus Fund before the acquisition of Franklin Templeton Mutual Fund, and became Franklin India Prima Plus Fund.
Later, the fund was renamed to Franklin India Equity Fund in June 2018 and followed a multi-cap approach. In late 2020, the fundamental attributes of this scheme were changed to follow a flexi cap approach, and thereafter it was recategorised and rechristened as Franklin India Flexi Cap Fund.
As of October 2025, this fund manages an AUM of over Rs 197 bn.
It now has the mandate to invest a minimum of 65% of assets in equity and equity-oriented instruments of companies across the market cap range without any upper or lower limit.
Thus, it dynamically invests in largecaps, midcaps, and smallcaps, depending on their outlook. It also invests up to 50% in equity derivatives for hedging and portfolio rebalancing purposes.
Other than that, for defensive considerations and liquidity needs, it invests up to 35% of its total assets in Treasury bills, Government securities, call or notice money, repos/reverse repos, TREPs, etc.
The investment objective is to provide growth of capital plus regular Income Distribution Cash Withdrawal (IDCW) through a diversified portfolio of equities, fixed income securities and money market instruments. There is no assurance that the investment objective of the scheme will be achieved.
The fund aims to manage the market cap allocations based on relative opportunities available. So, the fund manager considers market conditions, the fundamentals of the companies, valuations and liquidity, among a host of other factors, when approaching market cap segments.
This fund also follows a blend of value and growth style of investing, and approaches stocks bottom-up across sectors.
The fund prefers wealth-creating companies across sectors with a core focus on the fundamentally healthy ones in growth-oriented businesses. It prefers quality businesses with strong balance sheets and run by reliable management.
As regards market cap allocation, it’s decided based on the relative opportunities available.
Usually, it holds 50 to 60 stocks in its portfolio. As per its October 2025 portfolio, the fund has 56 stocks, of which 76% are largecaps, 11% midcaps, and around 9% smallcaps.
The top 10 stocks are around 44.6% of the portfolio and comprise names such as HDFC Bank (8.4%), ICICI Bank (7.4%), Bharti Airtel (4.7%), etc.
Banks (24.5%) constitute a major portion of the portfolio, followed by IT (8.5%) and auto & ancillaries (7.9%). These top 3 sectors are around 40.9% of the portfolio.
At present, the fund is holding 3.4% of the total assets in cash & cash equivalents and 0.3% in treasury bills.
Overall, the fund holds its portfolio with conviction and keeps its churn low. In the last one year, the portfolio turnover ratio of the fund was in the range of 18-29%.
This investment approach has rewarded investors decently. Over the last 3 years, 5 years, and 7 years, it has clocked a compounded annualised rolling return of 19.9%, 25.5%, and 16.4%, respectively, outperforming the benchmark, the Nifty 500 – TRI by a noticeable margin (as of 12 November 2025).
The risk taken by the fund (standard deviation of 11.85) is also slightly lower than its benchmark, the Nifty 500 – TRI. Thus, the risk-adjusted returns (reflected by the sharpe and sortino ratios of 0.32 and 0.66, respectively) are better than the Nifty 500 – TRI.
#3 Franklin India Dividend Yield Fund
This scheme was launched in May 2006 as Templeton India Equity Income Fund. Later, to enhance clarity and reflect the investment strategies better, in July 2025, it was renamed as Franklin India Dividend Yield Fund.
Since its launch, the fund has seen its AUM grow, and today, as per the October portfolio, it is managing assets worth over Rs 24 bn.
It is mandated to invest at least 65% of its total assets in equity & equity-related instruments of dividend-yielding companies. Out of these, the allocation to domestic companies could be 50-100% of the total assets, while in foreign securities up to 50%.
Within the equity allocation, the fund also has the mandate to invest 50% of the net assets in derivatives for hedging and rebalancing purposes.
Further, for defensive considerations and liquidity purposes, the fund also invests up to 35% of the total assets in debt securities, money market Instruments, units of REITs & InvITs, and cash.
The investment objective is to provide a combination of regular income and long-term capital appreciation by investing primarily in stocks that have a current or potentially attractive dividend yield, by using a value strategy.
It seeks to look at current or potentially attractive dividend yield as one of the major parameters to meet its investment objectives.
In other words, investments are made in Indian and emerging market companies that have the potential to provide growth through capital appreciation as well as regular income through dividends.
The fund holds a fairly diversified portfolio of 50-60 stocks. As of October 2025, it has 46 stocks, of which 52% are largecaps, 9% midcaps, and 16% smallcaps.
Plus, the fund is also holding 4.8% in overseas equities, 0.9% in overseas mutual fund units, 1.9% in ADRs & GDRs, and 10% in REITs & InvITs.
The top 10 stocks are 37.7% of the portfolio and comprise names such as NTPC (5%), HDFC Bank (4.7%), GAIL (4.4%), etc.
Power (11.9%), IT (9.9%) around 29.5% of the portfolio. and FMCG (7.7%) are the top 3 sectors of the fund, comprising
Currently, the fund is holding 6% in cash & cash equivalents.
The fund follows a buy-and-hold strategy for dividend yields and has a low portfolio turnover ratio in the range of 9-21%.
This investment approach has earned decent returns. Over the last 3 years, 5 years, and 7 years, it has clocked a compounded annualised rolling return of 19.2%, 27.1%, and 17.3%, respectively, outperforming the benchmark, the Nifty 500 – TRI by a noticeable margin (as of 12 November 2025).
The risk taken by the fund (standard deviation of 11.49) is lower than its benchmark, the Nifty 500 – TRI, and it has fared better on a risk-adjusted basis (as reflected by the sharpe and sortino ratios of 0.34 and 0.75).
Performance of Top Equity Funds of Franklin Templeton Mutual Fund
| Absolute (%) | CAGR (%) | Risk Ratios | |||||
| 1 Yr | 3 Yr | 5 Yr | 7 Yr | Std Dev | Sharpe | Sortino | |
| Franklin India Mid Cap Fund | 13.36 | 23.72 | 26.00 | 16.59 | 14.38 | 0.35 | 0.70 |
| Franklin India Flexi Cap Fund | 9.84 | 19.96 | 25.49 | 16.36 | 11.85 | 0.32 | 0.66 |
| Franklin India Dividend Yield Fund | 5.96 | 19.20 | 27.12 | 17.31 | 11.49 | 0.34 | 0.75 |
| Nifty Midcap 150 – TRI | 8.49 | 23.39 | 29.32 | 18.31 | 15.29 | 0.34 | 0.67 |
| NIFTY 500 – TRI | 6.85 | 16.25 | 21.34 | 14.54 | 12.53 | 0.26 | 0.52 |
Data as of 12 November 2025.
Returns are on a rolling basis and in %, calculated using the Direct Plan-Growth option.
Standard Deviation indicates Total Risk, and Sharpe Ratio measures the Risk-Adjusted Return. They are calculated over 3 years for equity funds, assuming a risk-free rate of 6% p.a.
“Past performance is not an indicator of future returns. The securities quoted in the table are for illustration only and are not recommendatory.”
Speak to your investment advisor for further assistance before investing.
Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully.
Conclusion
Franklin Templeton Mutual Funds has robust investment process and systems. Some of their equity schemes have fared reasonably well.
However, it is important not to get carried away by historical performance, as it may not necessarily sustain in the future.
Ideally, diversify your mutual fund portfolio across fund houses, thereby reducing concentration risk.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here…
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.