Covid 19 Impact: Franklin Templeton Mutual Fund India Shuts 6 Schemes

As a fall out from the risk impact by the Covid-19, Franklin Templeton Trustee Services Private Limited has decided to wind up six schemes run by Franklin Templeton Mutual Fund. In a notice on its website Franklin Templeton Mutual Fund said that the schemes that would be shut would include:

1) Franklin India Low Duration Fund

2) Franklin India Ultra Short Bond Fund

3) Franklin India Short Term Income Plan

4) Franklin India Credit Risk Fund

5) Franklin India Dynamic Accrual Fund

6) Franklin India Income Opportunities Fund

"There has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lock-down of the Indian economy which was necessary to address the same. At the same time, mutual funds, especially in the fixed income segment, are facing continuous and heightened redemptions.

The Trustees of Franklin Templeton Mutual Fund in India, after careful analysis and review of the recommendations submitted by Franklin Templeton Asset Management (India) Private Limited (the AMC), and in close consultation with the investment team, are of the considered opinion that an event has occurred, which requires these schemes to be wound up and that this is the only viable option to preserve value for unitholders and to enable an orderly and equitable exit for all investors in these unprecedented circumstances," the asset management company said in a release.

Individual emails are being dispatched to the unitholders.

"Pursuant to regulation 41(1) of the Mutual Fund Regulations, approval of the unitholders of the respective schemes will be sought separately. We propose to seek such approval through electronic or other appropriate means as far as circumstances permit. Pursuant to Regulation 40 of the SEBI (Mutual Funds) Regulations, 1996 on and from April 24, 2020 the Trustee and the AMC have: (a) ceased to carry on any business activity in respect of the Schemes; (b) ceased to create or cancel units in the Schemes; (c) ceased to issue or redeem units in the Schemes." the firm said in a release.

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