New Delhi: Franklin Templeton Investments (India), one of India’s fund houses launched a capital protection oriented scheme called Franklin Templeton Capital Protection Oriented Fund on 24April. The new fund offer period will run till 17May and units will be available at Rs 10 per unit.
This is the second capital protection fund from the company which had launched a similar fund in 2006. Crisil has given a rating of AAA (SO)# indicating the highest degree of certainty regarding timely repayment of face value of units.
Explaining the rationale for the new fund, Mr Vivek Kudva, president of the fund house said, “The product satisfies a felt need among Indian investors for an investment avenue that allows participation in stock markets without accompanying worries of capital erosion.
Many Indian investors place bulk of their savings in conventional fixed income avenues because of their discomfort with market-related returns. Yet, an allocation to equity may be necessary in a growing economy like India to earn healthy inflation-adjusted returns over the long term.
The fund hopes to bridge this need gap, enabling investors to benefit from the upside potential of equity investments without subjecting their capital to market-related volatility.
The product may be a safe bet for first-time mutual fund investors and also serve a place in the portfolio of all investors who put their savings in relatively safe investment avenues.
Elaborating on the fund’s investment strategy, Mr Santosh Kamath – CIO, Fixed Income said, “The fund’s hybrid structure and its ability to preserve capital are well-suited to current market conditions, where both the debt and equity markets have been displaying heightened volatility.