Franklin Templeton fiasco
Published On: Friday, April 24, 2020 | By: Team KnowMyStock
Franklin Templeton Mutual Fund has decided to wind up six debt mutual fund schemes. The six schemes are Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund. These schemes manage assets worth Rs 26,000 crore. “Significantly reduced liquidity in the Indian bond markets for most debt securities and unprecedented levels of redemptions following the COVID-19 outbreak and lockdown have compelled us to take this decision,” said Sanjay Sapre, president, Franklin Templeton India.
The company is not able to sell its investments because there are no takers in the market. The current uncertain situation in the economy and the market has made investors extremely risk averse. They want to play it safe and do not want to buy lower-rated and unrated papers. The fund is not able to sell investments to meet the redemption pressure.
Investors in these schemes will not be able to buy or sell these schemes anymore. No SIP/STP/SWP will work on these schemes.
Most advisors say the average maturity of the schemes might offer an indication of the lenth of waiting period. However, everything depends on the conditions in the debt market and whether the fund house manages to sell its holdings.
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