Franklin India Short Term Fund opens NFO on 5 August: Scheme type, duration and risk — Here's all investors need to know

Franklin Templeton has announced its new open-ended short term debt scheme — the Franklin India Short Term Fund (FISTF) on 3 August. It will invest across corporate debt securities including State Development Loans (SDLs), government securities, and money market instruments, the fund house said a release.

The new fund offer (NFO) will be open for subscription from 5 to 11 August 2026.

Avinash Satwalekar, President, Franklin Templeton–India, said the fund expands their fixed income offerings and will focus on providing investors “high-quality debt that balances income potential with prudent risk management” for their short to medium term investment goals."

Here's all investors need to know about the mutual fund scheme's type, duration, minimum investment amount and potential risk class.

FISTF: Here's all investors need to know

• The fund will be managed by Rahul Goswami, Chief Investment Officer & Managing Director, India Fixed Income, and Anuj Tagra and Rohan Maru, Vice Presidents and Portfolio Managers, India Fixed Income at Franklin Templeton.
• The portfolio may predominantly comprise AAA and AA+ rated corporate bonds and sovereign securities.
• The scheme type is an open-ended, short-term debt scheme, investing in instruments such that the Macaulay duration of the portfolio is between 1 year to 3 years.

• Minimum amount for investment is ₹5,000 and in multiples of ₹1 thereafter.
• Investment objective of the Franklin India Short Term Fund (FISTF) scheme is “to achieve optimal returns over the short term by investing in a diversified set of debt and money market securities.”
• The statement added, “However, there is no assurance that the investment objective of the scheme will be achieved.”

What is the fund strategy, potential risk class?

On the fund's investment strategy, manager Goswami in the statement said the fixed income market continues to present selective opportunities, particularly at the shorter end of the yield curve where elevated yields, adequate liquidity, amid evolving macroeconomic conditions. He added that the supportive demand-supply dynamics remain favourable.

“By dynamically navigating opportunities across the short- to medium-term segment of the curve, the fund aims to generate accrual-led returns while prudently managing interest-rate and credit risks, which could help deliver better risk-adjusted outcomes across market cycles,” he added.

The statement noted that potential risk class for the fund is B-III — which means it has relatively high-interest rate risk and moderate credit risk. It added that this has been calculated in accordance with Para 6.16 and 6.17 of SEBI Master Circular on Mutual Funds dated 20 March 2026.

Franklin India Short Term Fund: NFO features

Franklin Templeton is a mutual fund house operating in more than 35 countries, with $1.79 trillion in assets under management (AUM) as of 30 June 2026. As per AMFI's June data, Franklin Templeton (India) is among the largest foreign fund houses in the country. It has offices in 41 cities and Collection Centers in over 100 locations across the country.

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