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Franklin Templeton puts investment curbs on 3 fund of fund schemes: Report

A spokesperson said the paper the move is an “attempt to gate any arbitrage opportunities available to new investors while protecting the interest of existing investors.”

August 19, 2020 / 04:16 PM IST

Franklin Templeton has put investment curbs on three of its asset allocation fund of fund (FoF) schemes, which had invested in two debt allocation plans of the six programmes it wound down in April.

Investors can from August 18, put only a maximum of Rs 1 lakh per day in Franklin India Multi Asset Solution (FIMAS), Rs 2 lakh in Franklin India Dynamic Asset Allocation FoF (FIDAAF), Rs 25,000 in 30s Plan and 50’s Plus Plan of Franklin India Life Stage FoF, and Rs 50,000 in the 20’s Plan and 40s Plan of Franklin India Life stage FoF, The Economic Times reported.

A spokesperson for the fund house told the paper the move is an “attempt to gate any arbitrage opportunities available to new investors while protecting the interest of existing investors”.

Subject to approval for payment of investors, there is arbitrage opportunity for high net worth individuals (HNIs), the report added.

Notably, FIMAS and FIDAAF had invested parts of their debt component in the Franklin India Short Term Plan, while the Franklin India Life Stage FoF schemes have invested parts in the Franklin India Dynamic Accrual Plan – both of which are planned to be wound up, after court nod.

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Investments in both these plans were marked down by half in asset allocation schemes. As of August 14, Franklin India Dynamic Accrual has turned cash positive, while Franklin India Short Term Plan’s borrowings have fallen to 23 percent.
Moneycontrol News
first published: Aug 19, 2020 04:16 pm
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