Financial Daily from THE HINDU group of publications
Sunday, Sep 01, 2002
Markets - Mutual Funds
Templeton India Pension Plan: Invest
THE Templeton India Pension Plan (formerly Pioneer ITI Pension Plan) is a good investment option for conservative investors. Unlike most balanced funds, which have larger allocation to equities than to debt, the Pension Plan is a balanced fund with a debt tilt. It normally allocates around 60 per cent to debt and 40 per cent to equities.
The fund has generated compounded annual returns of around 12.5 per cent since its inception and has a track record of regular dividend payouts.
Investors in the fund need to keep close track of its performance over the next few months. The current period is crucial for the fund as it has recently migrated to Templeton Asset Management Company, following the takeover of Pioneer ITI's schemes by the Franklin Templeton group.
The fund continues to be managed by Mr R. Sukumar. But as a matter of abundant caution, investors in the fund need to watch out for changes in the structure or management of the scheme over the next few months.
The fund's equity portfolio is quite actively managed. It made the following changes to the portfolio in July 2002:
Asset allocation: The fund's allocation to equities has fallen from 39 to around 36 per cent of the assets between June 30 and July 31. Exposure to corporate debt remains unchanged at around 44 per cent. Much of assets released from liquidation of equities appear to have been retained as cash or cash equivalents.
While the fund's exposure to gilts remained at around 3.3 per cent through July, its current assets rose from 13.5 to 16.8 per cent of its portfolio. The high allocation to current assets may trim the potential for upward movement in the NAV, in the event of a rally in equities.
Stocks added: Pfizer was the sole stock to be added to the equity portfolio between end of June and July.
Stocks pared: The fund completely liquidated its holdings in Ranbaxy, Karur Vysya Bank and Dr Reddy's Labs.
: The fund's corporate debt portfolio remained more or less unchanged during the month, with IOC's Pass Through Certificates continuing as the largest exposure.
Fund facts: Templeton India Pension Plan is an open-end tax saving scheme. Investments in the scheme are eligible for a 20 per cent tax rebate under section 88 of the Income Tax Act. Investments carry a mandatory three-year lock-in period. The fund charges no entry load.<137>
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