Franklin Templeton Investments launches Corporate Bond Fund

Franklin Templeton Investments has launched a NFO 'Templeton India Corporate Bond Opportunities Fund' aiming to help investors take advantage of the current high yields and to build a strong presence in pure fixed income space.

The new fund offer (NFO), opens for subscription on November 15 and closes on November 29. The fund also aims at allowing capitalisation on opportunities by active interplay on credit, liquidity and interest rate opportunities, Franklin Templeton said in a release.

"We believe that the corporate bond market provides good opportunities in India for multiple reasons, including a fast growing economy, strong corporate balance sheets and expected increase in issuances. However, when compared to other similar markets, the corporate bond market in India is still at a nascent stage and is growing," Franklin Templeton India President Harshendu Bindal said.

The fund helps investors to take advantage of the current high yields and also potentially benefit from the capital gains once the interest cycle turns. "The interest in corporate bonds is likely to grow, both from domestic and foreign investors. In the current environment, we expect corporate bonds in the 1-3 year segment to outperform, due to relatively higher spreads and the fund will benefit from higher accruals in the coming quarters," the asset management firm's Chief Investment Officer for fixed income Santosh Kamath said.

The minimum investment in the scheme is Rs 5,000, and a 3% interest will be charged if the investor exits within a year, 2% after a year but before two years and 1% after two years but before two-and-a-half years. At the end of September quarter, Franklin Templeton managed average assets worth Rs 34,410.37 crore.