Franklin Templeton sees redemptions in other debt schemes as well

Despite the fall in AUM under the debt category, investors continued to show faith in the equity schemes of the Franklin Templeton MF.

The fund house had stated that closing of schemes was due to the severe market dislocation and illiquidity caused by Covid-19.
The fund house had stated that closing of schemes was due to the severe market dislocation and illiquidity caused by Covid-19.

Franklin Templeton Mutual Fund, which closed six debt schemes last month, has seen redemptions from its other debt schemes as well. Data showed that assets under management (AUM) in its liquid and money market schemes has declined compared to March. The fund house saw assets increase marginally in its gilt fund. The fund house had a total of 13 debt schemes, which included the six schemes it shuttered. Data from Value Research showed that aggregate AUM of seven debt schemes of Franklin Templeton MF stood at Rs 14,700.99 crore on March 31, which came down to Rs 9,293.34 crore in April — a decline of Rs 5,407.65.

Among the seven schemes, which are open to investors, Franklin India Liquid Fund saw a sharp fall in its assets in April. As on March 31, its AUM was Rs 6,962.56 crore, which came down to Rs 3,582.21 crore in April. The AUM of Franklin India Saving Fund in April was at Rs 1,894.73 crore, down Rs 1,461.95 crore compared to March.

Market participants say that since the fund house wound-up its six debt schemes, there has been a panic selling in other debt schemes of the fund house. “The fall in assets for few of its debt schemes was more to do with the apprehension on the fund house rather than any liquidity issue. High net worth individual and ultra-high networth individuals might have moved money from Franklin Templeton’s liquid and money market schemes,” said one industry expert.

On April 23, six schemes — Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund — collectively worth Rs 25,800 crore were wound down . The fund house had stated that closing of schemes was due to the severe market dislocation and illiquidity caused by Covid-19.

Liquid schemes invest in debt and money market securities with maturity of up to 91 days only. While money market has investments debt securities having maturity of up to one year. Apart from money market and liquid schemes, Franklin India Corporate Debt Fund saw its AUM decline by Rs 394.33 crore to Rs 1,071.73 crore in April and Franklin India Floating Rate Fund’s AUM fell by Rs 157.07 crore to Rs 250.27 crore in April compared to March.

Despite the fall in AUM under the debt category, investors continued to show faith in the equity schemes of the Franklin Templeton MF. The data from Value Research showed that equity funds such as Franklin India Bluechip Fund, Franklin India Equity Advantage Fund, Franklin India Equity Fund, Franklin India Focused Equity Fund and Franklin India Smaller Companies Fund, among others, saw rise in their AUM in April.

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