(In this column, FC will give its view on new

financial products launched in the market. This is a subjective view. Investors are

advised to take professional help in selecting a product and not make any decision on the basis of these reviews)

WHAT IT IS: It is an open-ended fund of funds scheme that seeks to provide capital appreciation by investing in units of Franklin US Opportunities Fund, an overseas Franklin Templeton mutual fund, which primarily invests in securities in the US. The fund reopens for subscription on February 14.

INVESTMENT OBJECTIVE: It helps Indian investors achieve diversification through exposure to high-quality US companies. The fund will allocate 90 to 100 per cent of the assets in units of Franklin US Opportunities Fund and up to 10 per cent of assets will be invested in debt and money market securities.

WHY INVEST IN US STOCKS? The US economy is showing signs of improvement that is evident from the recent consumer, jobs and housing-related data. Also, US equities account for 29.14 per cent of the world’s market capitalisation, so investors get an access to the world’s largest equity market and an opportunity to diversify portfolio globally with quality stocks.

GETTING IN AND OUT: The minimum investment for the fund is Rs 5,000. Investors can choose from growth and dividend options (with payout and reinvestment options). There is a 2 per cent exit load if the units are redeemed within one year from allotment. For redemption, it will take T (transaction date)+5 days, a little longer than T+2 days in case of domestic funds.

BENCHMARK CONUNDRUM: The benchmark used for Franklin US Opportunities Fund is the Russell 3000 Growth Index, which includes companies with higher price-to-book ratios and higher forecasted growth values. The index has companies with a median market cap of $1.049 billion.

FC VERDICT: This fund is for those who like to be a little adventurous because for the first time, Indian investors are getting an opportunity to get an exposure to high-growth US stocks. Recovery and signs of stability in the US economy make the fund a tempting option for investors looking for profits. Since the rupee is also strengthening, the currency risk is being reduced, compared with the NFO period (January 17-31), when the rupee traded above the 50 mark against the dollar. In addition, since many US companies derive growth from global markets, currency risk is taken care of for a long-term investor, and worries about slower US GDP (gross domestic product) growth arguments are not valid. The fund has given compounded and annualised returns of 19.08 per cent in US dollar terms and 22.45 per cent in rupee terms over the past three years as on December 31, 2011. While, the one-year return was –3.05 per cent in dollar terms, it was 15.08 per cent in rupee terms due to rupee depreciation.

—Ravi Ranjan Prasad