This Case is about ACCOUNTING
PUBLICATION DATE: March 14, 2013 PRODUCT #: W12524-HCB-ENG
Franklin Resources Inc. is one of the biggest and most respected international fund houses with a presence in India. The case emphasizes the structure, investment philosophy and procedure of its fund management team in India. The case presents the special problem of fund managers holding substantial sums of money during market declines. There’s one school of thought that credits better risk and lower volatility -adjusted yields with high cash holdings.
The other school of thought believes this strategy goes against the doctrine of investment management. A fund should be always fully invested or nearly fully invested.
The chief investment officer at the Franklin Templeton India is of the second school of thought and is confronted with the dispute of influencing a group of young analysts and managers of its security. He presents a set of statistics to this team and inquires them to scrutinize performance throughout periods of market downturns in order to arrive at a finale.