Franklin Templeton Mutual Fund made its six schemes non-operational in April 2020. Recently it generated Rs 15,272 Crore from coupon, pre-payments, and maturity of these schemes.
The shortage of liquidity and return in the bond market led to the closing of the schemes. The total market value of the schemes is Rs 25,000 crore.
In the first two weeks of March this year, these schemes generated Rs 224 crore. Also, the collection made up to March 15, 2021, is 15,272 crore.
It is found that the net asset value as of March 2021 is higher than that of last year when the decision of shutting down took place.
According to the company, the liquidation process will start to pay off the unitholders of the schemes. With the appointment of the liquidator. SBI Funds Management as liquidator the company is planning to initiate the process at the earliest and is done with the finalization of standard operating procedure.
Franklin Templeton in the statement told me to give integral support and assistance to SBI Funds Management.
The six schemes of Franklin Templeton are:
- Low Duration Fund,
- Dynamic Accrual Fund,
- Credit Risk Fund,
- Short Term Income Plan,
- Ultra Short Bond Fund, and
- Income Opportunities Fund.
The schemes were to invest in high-risk debt to gain higher returns. The pandemic of 2019 brought increases in the redemption of the schemes as investors were contemplating its effect on the economy.
Redemption to the investor was in the process through the borrowing of money which was insufficient. This led to the inadequacy of funds and incomplete redemption. Thereafter, the notification of shutting down the schemes circulated.
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