Franklin Build India Fund Direct Payout Inc Dist cum Cap Wdrl INF090I01JD0

Franklin Build India earns an Average Process Pillar rating.

The largest contributor to the rating is the fund's excellent long-term risk-adjusted performance. This can be seen in its ten-year alpha calculated relative to the category average, which suggests that the managers have shown skill in their allocation of risk. Management team experience, which averages 23 years at this fund, also strengthens the process. However, the process is limited by its parent firm's disappointing risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.4 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis.

This strategy leans toward larger, deeper value companies than its average peer in the Equity - Infrastructure Morningstar Category. Looking at additional factor exposure, the fund has held stocks with higher trading volumes compared to Morningstar Category Peers in the past few years. Such stocks may have less potential upside than illiquid holdings, but they are easier to trade during market downturns. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Lacking this ballast, the fund's prospects could rest on its ability to surpass peers during economic booms. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the managers have tended to overweight yield, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. Stocks with high yields can be more stable, mature companies, but at times extreme market pressure or fundamental deterioration may prompt them to cut their dividends, which tends to hurt stock performance. In this month, the strategy also had more exposure to the Yield factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in energy and utilities relative to the category average by 3.9 and 3.6 percentage points, respectively. The sectors with low exposure compared with category peers are basic materials and industrials, underweight the average by 7.5 and 3.2 percentage points of assets, respectively. The portfolio is composed of 39 holdings and is relatively concentrated. In particular, 51.1% of the fund’s assets are housed within the top 10 holdings, compared with the category’s 29.1% average. And in closing, in terms of portfolio turnover, looking at year-over-year movements, 31% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.