Equity returns in next 3 years will not be as good as last three years: Franklin Templeton MF

Equity returns in next 3 years will not be as good as last three years: Franklin Templeton MF


Franklin Templeton. File.

Franklin Templeton. File.

Equity market returns for investors in the next three years will not be as good as the last three years, a senior Franklin Templeton MF official said on July 3.

However, R. Janakiraman, its chief investment officer for emerging markets equities, told reporters that returns would be “respectable” and outperform other asset classes.

These comments were made on a day when benchmark indices scaled new all-time highs and at a time when concerns are being raised over high valuations in the equity market.

Janakiraman said market valuations are high because India is in the early stages of growth, which will last about five years. He also tried to allay concerns about investing too much money in too few stocks.

Pointing to the high number of initial public offerings recently, he said newly listed companies are creating avenues to absorb the additional funds being invested.

Over the past few years, equity returns in companies have been better than earnings growth and investors now need to be prepared for the opposite to happen.

“Equities will deliver respectable returns over the next three years. It will not be as good as the last three years, but it will be better than other asset classes,” he said while speaking at the launch of the asset manager's multicap fund offering.

Like competitors, half of the assets under management will be invested in small and mid-sized stocks, and exposure to large-cap stocks will serve to mitigate risk, he said.

However, as India moves forward, “we will see a number of names in the small and mid-sized space moving ahead, underlining the importance of this sector for investors.”

Franklin Templeton has again crossed the ₹1 lakh crore asset under management milestone about ten days ago, said Avinash Satwalekar, chairman of the asset manager. As of March, it was the 15th largest asset manager in the country.

He also said the company is looking at launching several fixed income funds this quarter, but declined to give any details.

The Multicap New Fund offer will open on July 8 and close on July 22, and one unit will be available for ₹10.


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