Franklin Templeton India shuts 6 credit fund schemes amid coronavirus COVID-19 crisis

MUMBAI: Franklin Templeton Mutual Fund has announced that it is closing six of its credit fund schemes in India due to liquidity issues amid the coronavirus crisis. The funds which will be shut are – Franklin India Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund, Income Opportunities Fund, the company said in a statement.

“There has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account of the COVID-19 crisis and the resultant lock-down of the Indian economy which was necessary to address the same,” it said.

The company took to Twiter and said, ”Franklin Templeton India Makes Decision to Close Yield-Oriented Managed Credit Suite to Protect Investor Assets Amid COVID-19 Related Market Dislocation Impacting Credit Sector in India.”

Franklin Templeton India Makes Decision to Close Yield-Oriented Managed Credit Suite to Protect Investor Assets Amid COVID-19 Related Market Dislocation Impacting Credit Sector in India.

Notice – https://t.co/gpFP6FbYKW
Press Release – https://t.co/chrP7MhVh0

— Franklin Templeton (@FTIIndia) April 23, 2020

The fund house further said that mutual funds, especially in the fixed income segment, are facing continuous and heightened redemptions.

The statement noted that the Trustees of Franklin Templeton Mutual Fund in India, after careful analysis are of “the considered opinion that an event has occurred, which requires these schemes to be wound up and that this is the only viable option to preserve value for unitholders and to enable an orderly and equitable exit for all investors in these unprecedented circumstances”.

It said that individual emails are being dispatched to the unitholders regarding the closure of the schemes.

The trustee or the people authorised by it will continue to realise or dispose-off the assets of the schemes in the best interest of the unitholders. The sale proceeds after the discharge of all liabilities and expenses will be paid to the unitholders in proportion to their respective interests in the assets of schemes.