Franklin Templeton Mutual Fund has decided to wind up six credit funds on account of the liquidity crisis following the coronavirus pandemic.
“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,” said a statement from Franklin Templeton Mutual Fund.
“This action is limited to the… funds, which 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,” it added.
The schemes that have been shut are 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.
All other funds managed by Franklin Templeton Mutual Fund in India – equity, debt and hybrid – are unaffected by this decision, said the statement.
“Significantly reduced liquidity in the Indian bond markets for most debt securities and unprecedented levels of redemptions following the COVID-19 outbreak and lockdown has compelled us to take this decision,” said Franklin Templeton (India) president Sanjay Sapre.
We remain fully committed and aligned with the interests of our investors and aim to assist the trustees to fully exit the managed credit strategy funds at the best possible value, added Mr. Spare.