Templeton India Equity Income Fund (TIEIF) is an open-ended diversified equity fund which will follow the value style of investing. Value style investing entails investing in stocks that are trading at a discount to their fair value. The fund manager invests in these stocks and holds onto them until the mispricing is corrected.
However what makes TIEIF an interesting investment proposition is its investment universe. The fund will invest in stocks which have a high dividend yield. Traditionally, stocks with a high dividend yield are considered to be attractive buys as they tend to be stable performers over longer time frames.
Furthermore, the fund is mandated to invest upto 50% of its corpus in foreign securities. This provides the fund with a unique edge from the diversification perspective. For investors whose portfolios are populated with domestic stocks and equity funds (which is the case with most investors), the fund offers an opportunity to diversify across global securities denominated in various foreign currencies like the US dollar, Yen and the Euro to name a few. Investors have the opportunity to diversify across several economies (both developed and emerging) and participate in their growth.
Franklin Templeton's expertise in researching emerging markets is particularly noteworthy. Its team led by Dr. J. Mark Mobius (refer to profile below) has carved a special niche for itself in this area.
Investors, who have a flair for equity-oriented investments and are looking to diversify their assets across various economies and currencies, should consider adding the fund to their portfolios.