Franklin Templeton Mutual Fund shuts six debt schemes

New Delhi, April 24

Industry body AMFI on Friday said the winding up of debt schemes by Franklin Templeton Mutual Fund is an isolated event and assured investors that their investments in debt schemes are safe.

The industry body assured investors that majority of fixed income mutual fund assets are invested in superior credit quality securities and such schemes have appropriate liquidity to ensure normal operations.

The assurance by the Association of Mutual Funds in India (AMFI) came after Franklin Templeton MF decided to wind up its six debt schemes citing redemption pressure and lack of liquidity in bond markets due to coronavirus pandemic.

This is the first instance when a fund house is shutting its schemes because of coronavirus-related pandemic.

In a concall, AMFI Chairman Nilesh Shah said, winding up of schemes by the fund house is an isolated event and will have no bearing on other mutual funds and assured investors that their investments in debt mutual fund schemes are safe.

Shah further noted that many mutual funds have independently informed that they don’t have any outstanding borrowing.

He said liquidity, maturity profile and credit quality for debt funds are appropriate for day-to-day operations to continue uninterruptedly.

HDFC MF managing director Milind Barve and Aditya Birla Sunlife MF CEO A Balasubramanian who also attended the concall, said this was an one-off incident and retail investors should not panic. — PTI

Brokers’ body seeks SEBI intervention

• The schemes that have been shut are Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund. These cumulatively manage assets worth Rs26,000 crore
• Terming the shutdown of six debt schemes by Franklin Templeton as an extreme step that has created panic, an umbrella body of brokers on Friday sought SEBI and FinMin’s intervention to protect investor interest

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