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Last Updated : Jun 03, 2020 11:39 AM IST | Source:

Investors in two Franklin Templeton debt schemes may get their money back by July: Report

These investors will reportedly get back 7-9 percent of their money by July first week

Investors in Franklin Templeton Mutual Funds’ Franklin Dynamic Accrual Fund and Ultra Short Term Fund are likely to get back 7-9 percent of their money by July first week.

Advisors said this signals that these two funds’ bank borrowings have been repaid and they are “cash-positive”. But the repayment schedule will be subject to unitholders approving winding up of the six debt schemes by FT mutual fund (MF), The Economic Times reported. This is scheduled from June 9-11.

Trustees will be able to sell the securities only once approval is received.


A spokesperson for FT said schemes of shorter durations would return monies to investor faster. “The schemes continue to receive regular coupon payments and maturities … person(s) authorised by unitholders will explore all appropriate opportunities to monetise underlying assets in the portfolio, such that it can return investor monies at the earliest possible time,” they added.

Borrowing in Ultra Short Fund with assets under management of Rs 9,600 crore was at 6.58 percent of the assets on April 23, reduced to 5.34 percent on April 30, and turned cash surplus at 2.92 percent on May 31. Meanwhile, Dynamic Accrual Fund had a borrowing of 1.41 percent, which jumped to 2.38 percent in April, but turned cash surplus at 4.48 percent on May 31.

Amol Joshi, founder, Plan Rupee told the paper, “FT Ultra Short Bond Fund will have cash of 9 percent while in the case of FT Dynamic Accrual, it will be 7.5 percent by June 30, 2020.

Ultra Short Term has maturities of 6 percent of its corpus while for Dynamic Accrual Fund, it is 3 percent. FT would look to pay out as much as possible as and when it has cash, the report said.

Investors in the four other – longer-term schemes – will likely have to wait longer. While borrowings are down from April, it is not converted to cash yet. Borrowings on May 31 for Franklin India Income Opportunities was 34.4 percent, followed by Franklin India Short Term (29.4 percent), Franklin India Credit Risk Fund (8.74 percent) and Franklin Low Duration (7.5 percent).
First Published on Jun 2, 2020 01:57 pm