Franklin Templeton shuts six debt schemes. What does it mean for debt investors?
No investments or redemptions will be allowed in these schemes from today. Investors will receive whatever proceeds the fund house is able to recover by liquidating the underlying investments in the respective schemes
The closing down of these schemes will have a direct impact on the other schemes of Franklin Templeton Mutual Fund that had invested in any of these schemes, as they will not be able to exit these holdings
It looks like the woes of debt fund investors are far from over. In an unprecedented move, Franklin Templeton Mutual Fund has announced the winding up of six of its debt schemes as it faced severe redemption pressure and illiquidity in the bond markets due to the ongoing covid-19 crisis. The schemes that Franklin Templeton Mutual Fund is going to close include Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund and Income Opportunities Fund. According to data available on the Value Research website, these schemes collectively hold assets of ₹30,853 crore in their collective portfolio, as of end of March.