23/04/2020
Franklin Templeton Mutual Fund in India on April 23 announced its decision to wind up its suite of six yield-oriented, managed credit funds effective today.
"In light of the severe market dislocation and illiquidity caused by the COVID-19 pandemic, this decision has been taken in order to protect value for investors via a managed sale of the portfolio," the company said in a statement.
The decision is restricted to six funds which, the company said, have material direct exposure to the higher-yielding, lower-rated credit securities in India that have been most impacted by the ongoing liquidity crisis in the market. These include Franklin India Low Duration Fund, Dynamic Accrual Fund, Credit Risk Fund, Short Term Income Plan, Ultra Short Bond Fund and Income Opportunities Fund.
Sanjay Sapre, President, Franklin Templeton – India, said, "The decision to wind up these funds was an extremely difficult one, but we believe, it is necessary to protect value for our investors and presented the only viable means to secure an orderly realization of portfolio assets."
The company noted that all other funds managed by Franklin Templeton Mutual Fund in India – equity, debt, and hybrid – will remain unaffected by this decision. "These other funds are managed by independent teams of investment managers and continue to perform as per their respective investment mandates," it said.