To begin with, I would like to suggest Mouthshut to remove Kothari Pioneer as a category in the Mutual Funds section because it is already a couple of months since Templeton took over Kothari Pioneer. In fact, at the time of its merger, Kothari Pioneer existed as Pioneer ITI due to a sell off.
Well, I have been an investor with Templeton at around the same time as with Kothari Pioneer and find that the 'Pioneer'ed funds score well over a number of factors.
Both the fund houses carried their own strengths and weaknesses, now that both are one entity, let us talk about what suits which investor.
Templeton India Income Fund has been a good fund giving returns on par with any other fund in the category. But Pioneer's fund now renamed as Franklin India Income Builder Account did much better though slightly at a higher risk and it benefitted a long term investor. (For income fund, I consider long-term as more than 1 to 1.5 years).
I suggest Income Builder Account. This is the scheme that has been among the top 5 income funds for quite some time now.
Templeton India Government Securities Fund did excellently while Pioneer's same category fund failed to perform (I do not remember its new name now).
For Gilts, I suggest Templeton Gov Sec Fund. It is surprising to find that in this category, this is the only fund that charges an exit load of .5% if exited within 6 months. No other gilt fund in the market does so.
If a new investor who has not heard of both Templeton and Pioneer wants to invest, he/she will definitely get confused with more than one fund in each category. Eg. which one - Templeton India Income Fund or Franklin Income Builder Account? Franklin India Growth Fund (FIGF) or Templeton India Growth Fund (TIGF). While FIGF is performing pathetically, TIGF is very good option.
The confusion just does not end there. Prior to the merger, Pioneer had its own Index Funds one each for tracking BSE, NSE and Templeton too had two, Franklin India Index Fund and Franklin India Index Tax Fund both tracking NSE. Taken together now, there are atleast 4 to choose from. Which one to choose?
I suggest even for a naive investor, index funds are useless.
On the same lines, better than TIGF are the Bluechip Fund and Franklin Prima Fund (these two were the most successful under the Pioneer umbrella).
I suggest Bluechip Fund and Prima Fund when compared to Templeton India Growth Fund. But there is a block here. While the original Templeton equity funds have a lower initial investment amount (I think Rs.2000), Templeton is still carrying the legacy in Bluechip and Prima Fund by not changing the minimum investment amout from Rs. 5000 to Rs.2000. Thinking how does this matter to a small retail investor? Just read on.
I belive in Rupee Cost Averaging- it means that don't buy in particular equity units in huge number - if the stock market falls, you will have huge losses. If the market goes up, you are lucky. But I guess even God does not know which gamble works the next day. This means time to enter the market is of utmost importance. But even the best stock market gurus can't make the best timing.
So, the best way to get into equities is initially start with a small investment, minimize the stock market volatality and the timing effects by regularly buying small number of units say, each month or each fortnight. Thus, it reduces your average cost of the unit and also the losses will be lesser as compared to buying the units in huge number at one go.
Take the case of current stock market scenario which is very volatile. If one wants to build an equity portfolio through mutual funds, investing Rs.5000 and investing Rs.2000 certainly makes a difference. If war erupts, your Rs.5000 invested today may as well become Rs.4000 tomorrow as compared to your money becoming Rs.1800 from the invested sum of Rs.2000. If you invest the same Rs.5000 with the initial Rs.2000 first then in multiples of Rs.500 (six times) or Rs.1000 (3 times), you will lessen losses whichever happens. (Is Franklin Templteon listening ??)
For everything there is a tradeoff. If the market is bullish you will get a lesser return with SIP than you would when invested in bulk. But in today's scenario, capital preservation is more important than higher greedy returns. So, make the best use of Systematic Investment Plan (SIP).
While TIGF has the initial investment of Rs.2000 and then periodic investments of Rs.500 and Bluechip, Prima Funds have initial amount of Rs.5000 and periodic amounts in multiples of Rs.1000, based on your capacity choose the fund.
Personally at this point, I suggest to wait for the war clouds to go then go for SIP of Bluechip and Prima than TIGF.
Coming to other points, customer service from Templeton is on par with any other fund. Because most of the fund houses have adopted SEBI guidelines and also internatinal service standards. So, obviously the customer service has to be satisfactory.
Having bought funds of various mutufal fund companies, I haven't found any dissatisfaction with any fund house.
Templeton's account statements are good enough to cover all the information. Any further help is just a phone call away if you are in major cities or else you could e-mail as well. In fact you could chat online with the service centre between office hours.
Finally, I consider investing is an art. Take into fact your risk appetite, period of investment and have a ceiling (say 10% or 15% per annum that you aim at) on the returns you expect. Coming to the ceiling, many other fund houses offer what is called a trigger to provide you profit booking option automatically, which is certainly one important customer service aspect that Franklin Templeton should at least now think of. Again is Franklin Templeton listening?
Don't be greedy to see the fund grow leaps and bounds. Keep booking profits when your ceiling is touched and reenter again if you wish. I find one advantage with Pioneer schemes of Templeton in this aspect. Interested? Again, read on!!
If you exit to book profits from a scheme, you can re-enter within 30 days of exit without having to pay the entry load (Remember it is 2% for equity funds at present) again.
Beware, no other fund house and even the legacy Templeton funds like TIGF do not have this feature. Which means if you are an existing investor in Bluechip Fund let us say, exit the fund when the war breaks out, get in again without paying the entry load of 2% when the NAVs get lower, yet book profits.
Is it clear that by investing in mutual funds the myth that you can totally forget about your money because your fund house is supposed to take care of it is 100% myth only?
Not only the timing of entry into the fund is important, the timing of exit is even more important. Again coming to the exit timing, it is best done when you have an online access to your account.
If you go through the conventional way of redeeming, by the time your request is processed may be the next day or the next to next (due to postal delays, your broker delays), the stock market is either up or down. If you are unfortunate enough, you will get lower returns. Online is the best choice to minimize this effect. Give an online redeem request well before cut-off time and you will have that day's NAV applicable for your units. All fund houses offer this feature for free. Utilize it. If you are reading this review, you anyway have internet access. So, go utilize this feature. Fund houses are encouraing this.
Wishing you a happy investing.
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