Franklin Templeton’s closed debt funds get Rs 1,498 cr in two weeks; four schemes turn cash positive

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September 3, 2020 2:00 PM

Franklin Templeton said that Rs 1,498 crore have been received in the last two weeks in form of maturities, prepayments and coupon payments.

On April 23, six debt schemes collectively worth Rs 25,800 crore were wound down by Franklin Templeton MF due to the severe market dislocation and illiquidity caused by the Covid.On April 23, six debt schemes collectively worth Rs 25,800 crore were wound down by Franklin Templeton MF due to the severe market dislocation and liquidity issues caused by the Covid.

Franklin Templeton Mutual Fund has informed investors that its six debt fund schemes, which were wound up earlier this year, have received Rs 6,486 crore since April 24. Of this, Franklin Templeton said that Rs 1,498 crore has been received in the last two weeks in form of maturities, prepayments and coupon payments. With this, of the six debt fund schemes that Franklin Templeton abruptly wound up in April, four of the schemes have now turned cash positive. The fund house with over two decades of experience in the Indian mutual fund industry, has been under pressure since April when it closed six debt funds citing redemption pressure and lack of liquidity in the bond market.

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The four mutual fund schemes that are now cash positive are Franklin India Credit Risk Fund; Franklin India Dynamic Accrual Fund; Franklin India Low Duration Fund; and Franklin India Ultra Short Bond Fund. Of these, the Franklin India Ultra Short Bond Fund’s cash position was at 31% at the end of August. For Franklin India Dynamic Accrual Fund the cash position was at 14%. On the other hand Franklin India Low Duration Fund had 5% in cash 1% for Franklin India Credit Risk Fund. The latter are the latest to turn cash positive.

Franklin Templeton India is currently battling cases related to its decision to wind up the schemes at the Karnataka High court. Until then the fund house has been asked not to hold e-voting for the closed debt fund schemes. The AUM of the six funds closed by Franklin Templeton in April this year stood at Rs 25,800 crore. According to Franklin Templeton, the AUM of all the schemes at the end of August stood at Rs 24,858 crore. Franklin India Short Term Income Plan and Franklin India Income Opportunities Fund still have outstanding borrowing, which translated to 23% and 38% of their AUM at the end of August.

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