Templeton MF launches India Income Opportunities Fund

Franklin Templeton Investments (India), is launched a new open end income fund called Templeton India Income Opportunities Fund (TIIOF). The fund has the ability to take concentrated exposure to a particular category of income securities based on the opportunities available.

The New Fund Offer will be open from December 1, 2009 to December 10, 2009 during which, units will be available at Rs.10 per unit. (View - New Fund Offers open NOW)

On the rationale for launching the new fund, Mr. Harshendu Bindal, President, Franklin Templeton India said, “Globally interest rates are at historical lows as Central Banks adopted an ultra accommodative monetary policy to support economic growth and boost systemic liquidity. We have witnessed this trend in India as well with low benchmark rates and easy liquidity – this has lowered the return potential of fixed income investment avenues”.

“In such a situation, fixed income investors are looking for investment avenues that can provide superior return potential (without taking undue credit risk) and stability of capital. TIIOF caters to this need and strengthens our fixed income product range. In the current environment, it will be focusing mainly on securitized and high yielding corporate debt, to take advantage of the yield premiums. Also the relatively high exit loads and a cap on maximum investment per folio make it a retail oriented product”

Speaking about the fund’s strategy, Mr. Santosh Kamath, Chief Investment Officer – Fixed Income, added, “Our current analysis indicates that a portfolio focused on good quality securitized debt and NBFCs, has the potential to deliver superior returns. Within the securitized debt space we are looking to take exposure to single loan PTCs and ABS. We believe that a strengthening economy will lead to a contraction in spreads benefiting such securities and our focus on accruals is likely to help in mitigating the impact of any hardening of rates.

PTCs have been an important part of our portfolios for the past few years and we have built a considerable knowledge base and expertise. This provides us with an edge in terms of evaluating and using these securities in our portfolios. These securities currently offer an attractive spread over corresponding maturity bonds and their historical default rates (for investment grade) have been very low, through economic cycles. We would also be looking at corporate bonds that offer relatively high yields and are part of our investment universe.”

Scheme Details

The scheme offers growth and dividend plan, dividend option offers dividend payout and dividend re-investment facilities.

The minimum investment amount is Rs 5000 and in multiples of Re 1 thereafter.

Entry load - nil. Exit load will be 3% if redeemed within 6 months from the date of allotment, 2% if redeemed after 6 months but within 12 months from the date of allotment and 1% if redeemed after 12 months but within 18 months from the date of allotment.

The scheme will allocate up-to 100% of net assets in government securities and/or securities unconditionally guaranteed by the central/state government for repayment of principal and interest. It would invest up-to 100% of assets in debt securities issued by Public Sector Undertakings (PSU), debt securities issued by private sector corporate including banks and financial institutions and securitized debt. The scheme may invest up-to 100% of its assets in money market instruments.

Benchmark Index for the scheme is Crisil Short Term Bond Fund Index.

The fund managers of the scheme will be Vivek Ahuja and Sachin Padwal Desai.

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