This Mutual Fund Has Delivered Less Than FDs Return in 5 Years

Franklin Asian Equity Fund is an open-ended equity scheme that invests in companies across Asian markets, excluding Japan. The primary objective of the fund is to provide long-term capital appreciation by investing in businesses that are poised to benefit from structural growth trends in Asia.

This scheme offers geographical diversification by allocating capital to emerging and developed economies within Asia, giving investors access to broader regional growth beyond Indian borders.

How the Fund Works

The fund builds a portfolio of quality companies across market capitalisations—from large caps to mid and small caps—based in various Asian countries. Its investment strategy revolves around identifying businesses with strong fundamentals, sustainable earnings potential, and favourable long-term outlooks.

Rather than following a country-specific strategy, the fund focuses on sectoral and business opportunities across the region. This approach aims to capture long-term growth, driven by trends such as urbanisation, rising incomes, and technological innovation in Asia.

5-Year Performance Snapshot

As of May 13, 2025, the Net Asset Value (NAV) of Franklin Asian Equity Fund is ₹29.08. Over the past 5 years, the scheme has delivered annualised returns of 5.66%.

In comparison, fixed deposit (FD) interest rates in India during the same period have ranged between 6.5% to 7.5%. This implies that the mutual fund has underperformed even low-risk, fixed-income instruments such as FDs.

Read More: How To Invest in Foreign Stocks From India in 2025. 

The Significance of Comparing With FDs

Fixed deposits are considered low-risk, fixed-return investment options, making them a popular choice for conservative investors. When an equity mutual fund fails to outperform FDs over a 5-year period, it raises important considerations around risk-adjusted returns.

While mutual funds carry the potential for higher returns in the long run, underperformance over a multi-year horizon may prompt investors to review their asset allocation strategy, especially when compared with safer alternatives like FDs.

Conclusion

Franklin Asian Equity Fund’s performance over the last 5 years highlights an instance where an equity-based investment has lagged behind traditional fixed-income options. While mutual fund returns are inherently linked to market movements and international exposure adds another layer of complexity, such comparisons help investors understand the risk-return trade-off involved in international thematic funds.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.